[ad_1]
“Even if the deficit increases this year, it can be offset by gradual fiscal consolidation over the years.”
The International Monetary Fund (IMF) assessed that “further easing of fiscal and monetary policies will accelerate economic normalization and help those who have left their jobs to return to the labor market.”
According to the Ministry of Strategy and Finance, the IMF made this announcement in the ‘Results Announcement of the 2021 IMF-Korea Annual Meeting’ published on the 28th.
The IMF explained that along with the downside risks in the economic recovery process, Korea has a significant level of economic slack.
Inactive economic power refers to the part of economic production capacity, such as industrial production or employment, that is not used and remains inactive.
The IMF also diagnosed: “There is room for Korea to selectively increase the relocation expenses of workers and companies that are seriously affected (by Corona 19).”
There is believed to be room for targeted support for those affected by the coronavirus.
The IMF also assessed that “even if the size of the fiscal deficit increases slightly compared to this year’s budget, it will be offset by the process of gradual fiscal consolidation over the next few years.”
He said, “We welcome the Korean government’s proposal to operate the rules-based fiscal policy within a medium-term framework.”
The IMF also said, “There is room for additional support to support the economic recovery in the future and to manage the inflation rate closer to the Bank of Korea’s inflation target,” he said. “This can be achieved through additional monetary easing measures.” Advised.
In the case of the financial system, the general risk management is carried out correctly, but he noted that if household debt continues to increase rapidly in the future, the regulatory level needs to be raised even further.
It was diagnosed that financial support programs for small and medium-sized companies should also be transferred to measures to increase the viability of companies and promote restructuring in the process of economic recovery.
The Korean version of the New Deal was evaluated as a welcome strategy, as it ensures a new growth engine after the coronavirus.
Furthermore, the IMF added that the potential growth rate could be raised even further by removing some of the remaining rigidity in the current labor market.
This year, Korea’s real gross domestic product (GDP) growth rate is forecast to be 3.1% (provisional basis).
The IMF said: “The economy is likely to enter a recovery phase, but given the risks related to Corona 19, uncertainty about future prospects remains high.”
/ yunhap news
Ⓒ Hankyung.com prohibits unauthorized reproduction and redistribution
