Geum Yi

Finance minister calls for measures to boost corporate investment

May 18, 2020

Finance Minister Hong Nam-ki said Monday the ministry will come up with measures to encourage companies to boost investment as South Korea is drawing up the third extra budget to minimize the economic damage from the coronavirus pandemic.

Hong said in a meeting with senior ministry officials that deregulatory measures must be included in the government’s stimulus packages to boost corporate investment.

The government also needs to amend its policies for companies to increase jobs, Hong said.

Hong said the economic shock of the pandemic is expected to deepen in the second quarter.

South Korea’s export-reliant economy has taken a big hit as the nation’s two biggest trading partners — China and the United States — have wrestled with the virus, which originated in China and has hit the U.S. hardest.

Last week, South Korea reported the sharpest drop in its April employment since 1999 as the coronavirus pandemic hammered job markets.

The number of employed people in South Korea stood at 26.56 million in April, 476,000 people fewer than a year ago, marking the biggest on-year decline since February 1999.

In April, the nation’s exports tumbled 24.3 percent on-year to $36.9 billion. South Korea suffered a trade deficit of $950 million in April, snapping its 98 straight months of having more exports than imports.

The International Monetary Fund (IMF) has predicted that South Korea’s economy will shrink 1.2 percent this year as the global economy is expected to have its worst year since the Great Depression of the 1930s due to the pandemic.

The world economy is expected to contract 3 percent this year, the IMF said.