“We now perceive the eurozone crisis as a long-term threat to the South Korean economy,” says the finance minister. “We need to store up enough fiscal measures to endure this long journey.”
The government’s 8.5 trillion won ($7.4 billion) of economic support measures announced yesterday, including assistance for small businesses and low-income earners, leaves room for a bigger response if conditions deteriorate, said Choi Sang Mok, a director-general at the finance ministry.
Europe’s austerity drive is capping demand for Asian exports, with surging borrowing costs for Spain showing the euro region has yet to contain its crisis. South Korea’s gross domestic product may expand 3.3 percent this year, less than a December estimate of 3.7 percent, the Finance Ministry said yesterday in Gwacheon, south of Seoul.