South Korea is struggling to achieve its goal of 3 percent growth this year as skepticism grows over sluggish domestic demand and investment.
Officials said the government is not considering stimulus measures for now, as it has already injected an extra 11 trillion won ($9.76 billion) into the economy in August.
But it may come up with microeconomic measures to support vulnerable sectors if third-quarter growth is less than expected, they said. The data will be released late this month.
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(Yonhap) |
"The government will not announce comprehensive measures to boost the economy," a Ministry of Strategy and Finance official said Sunday. "But we may release plans to support people's livelihoods if we receive poor third-quarter data."
Recent data showed diminishing momentum for a recovery for Asia's fourth-largest economy, as strong exports are offset by sluggish domestic demand.
Its overseas sales have been on a steep rise since November last year thanks to the spike in global demand. In September, its exports soared 35 percent to reach an all-time high of $55.1 billion, led by semiconductors and displays.
But domestic demand and investment are still in the doldrums.
Retail sales dropped 1 percent on-month in August, breaking a three-month run of gains, while facility investment fell 0.3 percent two months in a row. The consumer sentiment index dropped for two straight months to a five-month low of 107.7 in September.
The economy grew 0.6 percent in the second quarter of this year, slowing sharply from a surprise 1.1 percent expansion in the first three months of 2017.
In July, the government raised its growth target to 3 percent from 2.6 percent on the robust exports. President Moon Jae-in also asked officials to make greater efforts to attain that goal in a staff meeting last week.
The economy would need more than 0.77 percent growth each in the third and fourth quarters to reach it.
But many experts expect the growth rate to hover around 0.6 percent range again in the third quarter.
Foreign investment banks, including Goldman Sachs and Barclays, recently forecast the country will not be able to achieve the goal because North Korea risks and a diplomatic row with China could weigh on the economy. (Yonhap)
