[EDITORIALS]No excuse for slow economyThe Bank of Korea lowered its prediction of next year’s economic growth rate to 4 percent. There is nothing new in the bank’s action, as various international organizations and private economic research institutes have already lowered their forecasts. What matters is whether our economy remains stagnant.
The central bank called a Monetary Policy Committee meeting Thursday and decided to maintain the benchmark call rate at its current level. Despite government pressure to lower it, the bank judged that lowering the rate will not have much effect on reviving the economy. It means that there is no solution for economic stagnation in the monetary policy. Although the government plans to revive the economy by making large scale investments in social overhead projects in the latter half of next year, the timing is late and the effectiveness and practicality are questionable. Therefore, no special measure can be found in the finance sector that can bring an immediate positive effect on the economy, either.
The bank’s decision to lower its growth prediction is nothing but an admission that a prolonged economic recession is unavoidable. We wonder what the government has been doing to allow the economy to deteriorate this far. Since the beginning of the year, the government has constantly evaded responsibility for the economic recession and changed its own word. It has deflected the responsibility onto previous administrations or claimed that “the media fanned a crisis theory.” It predicted, “The economy will get better from the second quarter.” Then, it said it will “improve in the second half.” Now it has stepped back, saying, “It may be difficult even next year.”
A private research institute pointed out that the government committed the mistake of failing to provide a countermeasure by failing to recognize the seriousness of the recession. When the diagnosis is not right, we can’t expect the right remedy. The government policies were often confused or conflicting against each other and lost the market’s trust.
The economic team, including Deputy Prime Minister Lee Hun-jai, must face the reality and consider what went wrong. Especially, Mr. Lee must solve this crisis with the promise that he will resign from the post if he fails. Excuses like the absence of presidential support or difficulties in persuading the Blue House and the ruling party can’t be the reason for policy failure.