Hyun sees second half growth rate of 3% plus

Hyun Oh-seok, deputy prime minister for economy and finance minister, said with confidence that the Korean economy would grow by more than 3 percent in the second half.

At a televised press conference yesterday, Hyun said the country will be able to reach its annual growth goal of 2.7 percent, owing to recovering exports and government policies starting to take effect in coming months.

“It is possible to achieve mid-3 percent growth in the latter part of the year, compared to the same period last year,” Hyun said.

The minister cited exports as a major reason.

“In the first half, exports almost didn’t grow, but we are expecting about 5 percent growth in exports in the second half,” he said.

The minister said that though there are remaining risks at home and abroad, they are not so serious that the government can’t manage them.

“There is no need to draw up another supplementary budget, since the government is focusing on loosening regulations on businesses to boost investment,” Hyun added.

Indicators released last month showed the Korean economy is slowly bouncing back.

According to the Bank of Korea, the current account surplus in the first half reached a record, edging close to $30 billion.

The Ministry of Strategy and Finance said industrial output is showing gradual improvement on a quarterly basis, raising expectations for economic recovery in the second half of the year.

Industrial output is a significant indicator of exports, as some of the world’s leading products include smartphones, ships and cars are manufactured here.

Private consumption also improved as the retail sales index rose from negative 1.2 percent to 0.4 percent, the ministry said.

Backed by recovery, businesses would be willing to make investment and their performances would be better, leading to increases in corporate tax payments, Hyun said. He dismissed worries that a shortfall in tax revenue would reach 20 trillion won by the end of the year.

“Economic democratization can go along with economic recovery,” Hyun said. “The seven passed legislations related to economic democratization will help businesses rather than regulating them.”

BY song su-hyun [ssh@joongang.co.kr]