South Korea | New finance minister casts gloomy view of economy

The economic difficulties that have beset South Korea this year are unlikely to ease much in 2019, according to Hong Nam-ki, the nation’s new finance minister.

“Next year may be considerably difficult,” Hong told reporters on Friday after replacing Kim Dong-yeon. Still, he said it’s “too early” to judge that the economy is in a crisis or recession.

President Moon Jae-in on Friday named Hong for the key roles of finance chief and deputy prime minister as he seeks to stem criticism over his income-led growth policy. Moon’s cabinet is struggling to tackle challenges ranging from youth unemployment to household debt and the potential impact of the U.S.-China trade war on Korea’s export-dependent economy.

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Hong, a former finance ministry spokesman, said he will seek to create more jobs in the service sector and emphasized the importance of fostering startups and pursuing deregulation. He reiterated the need to push forward with policies intended to increase wages and close the wealth gap more quickly.

On the government’s initiative to spur the economy through innovation, Hong stressed that public expenditure plays a key role in supporting the private sector. He said he will try to meet with business leaders every Wednesday and visit companies regularly.

Hong declined to comment on the central bank’s monetary policy. On the housing market, he said the government is ready to prepare further measures should prices become unstable again.

Hong, who holds a master’s degree in economics from the University of Salford, Manchester, has long served in public posts, including director-general at the finance ministry and senior secretary to the president for policy coordination, the presidential office said. Bloomberg