South Korea’s fin min nominee says economy below potential growth level

SEOUL: South Korea’s finance minister nominee said that the country’s months-long property thunder is getting calm down and economy is below its full prospective, indicating to markets that monetary contraction is not serious for now.

“(The economy) is below full its potential growth rate but it’s premature to say it’s in crisis or recession,” Hong Nam-ki told to reporters in his statement on Friday that were banned till Sunday.

Hong, who was appointed by the presidential office earlier on Friday, needs to get authorization of the parliament before taking office; however the authorization is not compulsory.

Hong’s statements are slightly different from the Bank of Korea’s remarks, which tells that the economy is “roughly near” the full potential growth level, and has opened the door for hike in a policy rate at its Nov. 30 monetary meeting. The economy increased at an annual 2.0 percent in July-September, and it is too slower than the second quarter’s 2.8 percent and missing the poll approximation of 2.2 percent mostly due to the above-trend development seen in the similar period last year.

According to Hong the overheated housing prices, was a very old problem for the administration, and it had been “stabilized somewhat”.

The central bank BOK had submitted a report to the parliament on Thursday in which it had mentioned that it saw a case for monetary policy tightening to control quick growth in consumer and corporate borrowing. – Reuters