Finance minister calls on companies to increase spending

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Finance minister calls on companies to increase spending

Korea’s finance minister on Wednesday renewed calls on companies to increase capital spending in order to boost Asia’s fourth-largest economy.

Hong Nam-ki made the comments in a meeting with economy-related ministers in Sejong.

Korea has ratcheted up efforts to revitalize the economy, calling corporate investment a key to job creation, while there are concerns that the economy may grow at a slower-than-expected rate amid the escalating trade dispute between the United States and China.

Hong also said the government will address regulations and difficulties facing companies to boost corporate investment.

In 2014, Hyundai Motor Group, the world’s fifth-largest carmaker by sales, purchased land for a project to build a 105-story building in southern Seoul, though no significant progress has yet been made due to regulations.

Hong’s latest appeal came a week after the Korea Development Institute, a state-run think tank, slashed its economic growth outlook for the country this year to 2.4 percent from 2.6 percent, citing weak domestic demand and slowing exports.

The KDI’s growth outlook is on par with the OECD’s latest economic projection of 2.4 percent.

The Korean economy expanded 2.7 percent in 2018, down from a solid 3.1 percent the previous year.

In the first quarter of the year, the economy unexpectedly contracted an estimated 0.3 percent from three months earlier, due to a sharper-than-expected decline in exports and a drop in facility investment.

The country’s outbound shipments have been in negative terrain, falling 2 percent on year to $48.86 billion in April, which marks an on-year decline for the fifth consecutive month due to a protracted slump in chips and weak demand from China, which accounts for a quarter of its exports.

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