The government cut its 2017 growth forecast to 2.6 percent from 3 percent on 29 December, the first time it has cut its outlook to below 3 percent since 1999 when the nation was recovering from the Asian financial crisis.
The ministry added that growing external uncertainties ― higher U.S. interest rates, a growing protectionism trend, Brexit and debt problems in China ― will also weigh heavily on the economy.
The government pledged to spend more than 21 trillion won ($17.39 billion) to boost the weak economy ― 13.3 trillion won from the budget and 8 trillion won in loans from policy lenders. It plans to frontload budget expenditure in the first quarter of next year at 31 percent of the total.
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Commentary by Jeonghwa Hong(Jeonghwa.hong@britishcouncil.or.kr)
Korea is in troubles for AI to fight against, bearish economy, political turbulences. Especially the sluggish economy would affect every corner of people’s lives. They say they will spend further less this year and even the rich are closing their wallets, which the government fears may lead to the consumption cliff.
However, Korea is education-conscious. Education is the last thing that parents will reduce their spending on. Even if people tighten their consumption belt, the wallet for their children’s education will still be open or a bit closed depending on their circumstances.