SEOUL (Reuters) – South Korea’s finance minister said on Monday some slowdown in economic growth would be unavoidable as the government prepares to revise forecasts for this year and next year due to the country’s ongoing political turmoil.
“There are concerns that the sentiment may be weakening due to the recent political situation,” Choi Sang-mok told reporters.
“Due to many downside risks it is inevitable that next year’s growth forecast will be lowered, and it is highly likely that it will fall slightly below the potential growth rate,” Choi said, without elaborating on the country’s potential growth rate.
The South Korean won last week hit its weakest level in 15 years amid domestic political uncertainty stoked by President Yoon Suk Yeol’s short-lived martial law order on Dec. 3 and his subsequent impeachment.
Asked if the government would need to swiftly draw up a supplementary budget early next year, Choi declined to directly answer but said “fiscal policies do need to play an active role.”
Choi also said the government will work with the Bank of Korea to sternly respond to any sharp volatilities in the foreign exchange market.
(Reporting by Cynthia Kim; Editing by Jamie Freed)
