The Bank of Korea is expected to brief the transition team of President-elect Park Geun-hye on overall monetary policy and economic outlook on Friday.
BOK officials said that the subjects presented would range from overviews of its monetary policy to household debt and its economic forecast for 2013.
Although the team’s official policy briefing ended on Thursday with the statistics bureau, the team included the central bank at the last minute after it had omitted it from the seven-day briefing schedule. The other economic-related agency that has been left out was the Financial Supervisory Service.
The team said that it included the central bank as it sees the need to listen to it on the country’s economic conditions, while already hearing about the FSS from the Financial Service Commission, the financial policymaking body.
The central bank, which recently froze its key base rate at 2.75 percent, lowered Korea’s growth outlook to 2.8 percent in 2013 from the initial 3.2 percent predicted in October 2012.
Korea’s growth, which relies on exports, would likely remain weak for sometime due to slow recovery in advanced economies such as Europe which is still struggling from a fiscal crisis, as well as the U.S. where uncertainties persist over its fiscal soundness.
Park’s team has mostly been focusing on ways to coordinate fiscal policy, mainly by hearing from government agencies such as the National Tax Service, the Ministry of Strategy and Finance, and Korea Customs Service as the president-elect seeks to secure the budget to finance welfare projects.
Unlike her predecessors, Park has not given a clear picture over foreign exchange or export policies, compared with welfare, and small and medium enterprises as she saw more importance in sustaining job growth than the GDP.
With the economy looking a bit pallid and the strengthening won being weighed down by monetary easing overseas and a weak yen, analysts said that Park’s team may now see the importance of receiving information or advice from the central bank on such issues critical to Korea’s growth.
BOK Governor Kim Choong-soo stressed that the central bank will continue its duty of being the inflation controller, while remaining macro-prudent over capital flows.
Meanwhile, the Fair Trade Commission said in a report to the team that it will slap hefty punitive fines against conglomerates caught mistreating their suppliers or SMEs, for instance, by pressuring them to lower costs.
By Park Hyong-ki (
hkp@heraldcorp.com)
