No relenting on real estate, warns Blue House

The government will not relent in its attempts to cool off the real estate market, according to the Blue House’s economic chief.

Yoon Jong-won, the Blue House’s senior secretary of economic affairs, emphasized Sunday of the government’s commitment to stabilizing the real estate market despite growing concerns that Korea could undergo a difficult year with global economic uncertainties.

“Even if there is trouble in the economic situation, the real estate market will not be used to stimulate the economy,” said Yoon at a press briefing in the Blue House in an overall assessment of the economy. “To ensure housing stability for the middle class, there is a need to maintain the downward stabilizing policy for the real estate market.”

The Moon Jae-in administration announced measures last September to curb real estate prices as they shot up in recent years. The market has cooled off since the September measures, with residential real estate transactions in Seoul dropping 74 percent in February compared to the previous year.

The economic chief said the government will continue with its stabilization measures, such as supplying 300,000 housing units by the first half of this year.

Meanwhile, Yoon admitted to uncertainties Korea faces in global trade despite solid economic indicators.

“We had initially forecast economic growth of 2.6 to 2.7 percent and a job numbers increase of 150,000,” said Yoon. “But the global economy has slowed from earlier expectations.”

“In terms of exports, it is showing a downward trend as in other countries,” Yoon said.

The Organization for Economic Cooperation and Development (OECD) said Korea’s January exports declined 5.9 percent from last year.

Yoon, however, maintained that the country’s economic foundations are strong.

“The economic fundamentals, such as [indicators in] the economy, finance and foreign exchange, are being strongly maintained,” said Yoon.

Meanwhile, private institutes have grim outlooks for the country’s economic growth this year, blaming export woes.

The Korea Economic Research Institute (KERI) said Sunday it expects Korea’s gross domestic product (GDP) growth rate to stand at 2.4 percent this year, compared to the government’s target of 2.7 percent, due to a drop in exports and investment.

The country posted GDP growth of 2.7 percent last year.

The research institute, under the Federation of Korean Industries business lobbying group, pointed to slowing exports, which led much of the growth last year, for this year’s drop.

Citing the extension of the U.S.-China trade dispute and worsening trade conditions such as a drop in semiconductor prices, KERI forecast export growth rates for this year to be at 2.9 percent, compared to 3.9 percent last year.

The organization also expected Korea’s current account surplus, or its net trade in goods and services, to be $63 billion this year, down $13.4 billion from last year.

KERI also provided a downbeat outlook on the employment situation.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]