South Korea's top central banker said Thursday that structural reforms are essential for Asian countries to emerge from their lackluster growth amid highly uncertain economic situations.
"A fundamental cause of the weakening of growth momentum in Asia seems to lie in a lack of proper structural reforms for productivity enhancement, rebalancing between internal and external demands and inclusive growth," Bank of Korea (BOK) Gov. Kim Choong-soo said in welcoming remarks for the conference on Asia's economic stability and challenges.
The BOK and the International Monetary Fund (IMF) are co-hosting the conference for a two-day run.
His remarks came as emerging countries, which once led the global growth, are seeing the growth momentum slow while advanced economies are showing growing signs of the economic recovery.
Emerging countries such as India and Indonesia, hit by growing prospects over U.S. stimulus tapering, are struggling to curb massive foreign capital outflows and currency depreciation.
Such nations got a short-term reprieve as the U.S. Federal Reserve surprised the market last week by announcing its decision not to start tapering its stimulus bond purchases.
"Potentially, a prolonged period of stable economic and financial conditions may heighten complacency in Asia," the governor said.
Gov. Kim also stressed the need to pursue policy coordination, saying that countries should take into account possible spillover effects to other nations in carrying out their macroeconomic or monetary policies.
"Given the increasingly intertwined financial and economic linkages, the results of policy choices by major economies can have a negative impact on emerging market economies, which could boomerang and end up with two-side spillovers," he noted. (Yonhap News)
