SEOUL/SEJONG, Jan. 28 (Korea Bizwire) – South Korea’s finance minister said Thursday that the government will make determined efforts to help companies make headway into untapped overseas markets like Iran, and revive exports as Asia’s fourth largest economy strives keep alive its economic momentum in the coming months.
“We are facing challenges as uncertainties are rising, and emerging countries are catching up with us, but there are still opportunities out there,” Yoo Il-ho said in a meeting of economy-related ministers in Seoul.
The top economic policymaker said as Iran is opening its market, Korea has to draw out comprehensive plans to bring about a second Middle East boom there.
“The government will move to provide necessary information to companies and will establish a bilateral payment system to help them do business there,” the official, who doubles as deputy prime minister in charge of economic affairs, said.
South Korea’s first Middle East boom started in the 1970s as South Korean construction companies and labor workers participated in plant and development projects in Saudi Arabia and other oil-rich countries.
He then stressed that reviving exports is the key for the South Korean economy to get back on the right track in 2016.’
South Korea’s economy grew 2.6 percent in 2015, slowing from 3.3 percent growth in the previous year, according to its central bank. The country’s exports plunged nearly 8 percent last year, with outbound shipment figures posting minus on-year growth for 12 straight months.
“Considering all the internal and external headwinds, the country put up a better fight than expected,” Yoo claimed.
He said the better-than-expected performance was led by a rise in domestic demand on the back of the government’s consumption revitalizing measures including a nationwide discount event and tax cut programs.
Highlighting this point, the minister said exports actually dragged down the economy by 1.2 percentage points last year, while domestic demand added 3.7 percentage points to growth. He said domestic demand growth was the highest reached since 2010.
In order to maintain the growth momentum in domestic demand, Yoo called for sweeping structural reforms in the labor, education, public and financial sectors.
“We are focusing on swift structural reforms to help the private sector lead economic growth,” he said.