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Home > mk Business News 프린트 이메일 전송 리스트
KDI underscores need for monetary easing
By Chun Beom-joo, Chung Seok-woo
2013.11.18 17:53:37
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South Korea’s economic recovery has been hindered partly by the government and central bank’s inadequate measures. As such, the Ministry of Strategy and Finance called on the Bank of Korea (BOK) to come forward to take monetary easing including a rate cut to stimulate the economy.

[KDI underscores need for monetary easing ] 기사의 본문 이미지

The nation’s inflation rate will likely record around 1.7 percent to 2.3 percent next year, as much as one percent lower than the BOK's inflation target range of 2.5 percent to 3.5 percent, according to the Korea Development Institute (KDI) Monday.

Such a low inflation came in part from the government’s failure to appropriately manage aggregate demand including investment and consumption. As the aggregate demand went down, this drove down inflation rate by 0.78 percentage points. This accounts for 47 percent of the total risks that push down inflation. KDI stressed, “the current inflation rate is excessively lower than the inflation target range, showing that we have room to implement monetary policies in the short-term,” emphasizing the need for expansionary monetary policies including key rate cut.
An official from the industry said, “no other nations post as low as one percent inflation rate when its growth rate reaches three percent,” adding “Korea’s inflation rate has leeway to further climb.” The official harshly blamed the BOK noting, “it is no exaggeration to say the central bank has done nothing to prop up the domestic consumption.”



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