Moon not fazedPresident Moon Jae-in, who has dropped in on events in support of the country’s two most valuable companies — Samsung Electronics and Hyundai Motor, summoned economy-related ministers to examine current economic affairs on Thursday. He urged aggressive government support for exporters to revive business sentiment. He pointed out that the export-reliant economy was suffering from external volatilities and reduced global demand and ordered the government to go the extra mile in support of the economy and businesses.
The president chaired the economy cabinet meeting for the first time since December last year at a time when the deputy prime minister is away in the United States for a government investor relations event. Some expected policy changes from the president, who has stayed optimistic about the economy despite poor data.
But hopes were dashed. The president was still self-indulgent by highlighting improvements in employment data all thanks to consistent government policies. He did not mention the downgrades on economic growth estimates by foreign and domestic institutions, the central bank’s revisit to record-low interest rates through the second cut and 179,000 losses in jobs for workers in their 40s. He did not indicate any changes to the income-led growth and other business-unfriendly policies.
Kim Sang-jo, the president’s policy chief, denied the criticism of over-optimism about the economy. He claimed no one in the government sees the economy in an optimistic light. He claimed the policies were entirely market-accommodative to cope with “grave conditions.” But Moon did not display such a sense of urgency during the latest meeting.
He emphasized the role of the construction sector to boost demand, a comment suggesting increases in infrastructure spending ahead of the general election in April. The government cannot expect legislative support to back economic stimuli if it aims to artificially prop up the economy through tax spending ahead of the election.
JoongAng Ilbo, Oct. 18, Page 30