Vice Economy Minister vows gov’t measures to boost economy, stabilize prices

Bang Ki-sun, the first vice minister of the Ministry of Economy and Finance, at an emergency meeting with economy-related vice ministers on Mar. 31. [Photo provided by Ministry of Economy and Finance]

There is growing uncertainty looming over the South Korean economy as exports remain weak and industrial production slides, according to a high-ranking government official.

“The overall industrial output is showing signs of recovery from a slump in the fourth quarter but the mining and manufacturing output sank due to weak exports, which signals the level of uncertainty in the economy is still high,” said Bang Ki-sun, the first vice minister of the Ministry of Economy and Finance.

His remarks were made at an emergency meeting with economy-related vice ministers on Friday to discuss the trend of exports and imports. They also came after Statistics Korea announced that overall industrial output gained 0.3 percent on month in February but the seasonally adjusted mining and manufacturing output fell 3.2 percent, including a 17.1 percent decline in the production of chips.

Bang noted that Korea’s exports in the first 20 days of March fell 17.4 percent from the same period a year ago, mainly led by sluggish shipments to China, Korea’s largest trading partner. He expected the decline to be steeper than the 7.5 percent in February given the base effect of March last year when exports hit a record high.

“The government will spare no effort to stimulate recovery in exports with tax breaks and other supportive measures,” Bang said.

The National Assembly passed a bill that raises tax incentives for investments in the chip industry and other national strategic technology areas. The government is expected to swiftly work on the revision of relevant laws accordingly.

Multiple agendas were discussed at the meeting on Friday, including financial incentives for small and mid-size companies and responses to fluctuating prices of oil and agriculture, livestock, and fishery products.

“There are growing concerns over supportive financing for SMEs since the shutdown of the Silicon Valley Bank in the U.S.,” Bang said. “The Korean authority will develop measures to improve corporate access to financial incentives and to promote widespread use of such benefits.”

The Korean government earlier vowed to offer a record-high policy financing worth 540 trillion won ($418.6 billion) this year, up 45 trillion won from last year.

When it comes to inflation, Bang expects that prices will stabilize in March after the growth fell to below 5 percent for the first time in 10 months in February.

“Prices of certain agricultural and livestock products such as radish and chicken continue to rise due to the cold wave,” Bang said. “The government will continue to provide 17 billion won in funds to lower the prices of high-priced items in the second quarter.”