Bahk says contingency plans needed as economy slides

Korea should start preparing for the worst-case scenarios in terms of economic developments at home and abroad as the fiscal crisis in the euro zone will likely become a “long-term” problem, the Finance Minister Bahk Jae-wan said yesterday.

But Bahk dismissed the need for a supplementary budget to spur the slumping economy, saying the country can manage with efficient spending and by overhauling its tax system to boost revenue.

“Negative external factors may not be resolved in a short period of time,” he was quoted as saying at a meeting of a government committee on fiscal management.

He said Korea needs to brace for a long-term crisis sparked by the euro zone’s travails, and that expanding tax revenues should be considered a first move. “[The government] is working with the fiscal management committee to come up with ways to realign qualifications for tax exemptions and preferential tax status, shed light on unreported income to expand tax revenues, and also look for ways to ensure more efficient government spending,” he said.

Bahk’s remarks come three days after he told a parliamentary interpellation session that local market conditions did not warrant such a budget. Yonhap