Despite having dropped interest rates to record lows plus record stimulus efforts, South Korea’s economy is failing to generate growth.
“We have expected fiscal spending to play the supporting role in adding vitality to the private sector, said Hong Nam-ki, South Korea’s finance minister. “However, it is not working well with limited spillover effects, making us worried.”
South Korea’s economy, the fourth largest in Asia, grew only 2 percent in the third quarter, on track this year to be its weakest growth in a decade. Exports fell for 11 months straight.
In the third quarter, household spending slipped by 3 percent and corporate investments declined by 2.7 percent.