The new governor of the Bank of Korea(BOK) sees the Korean economy at a major turning point, and said it is difficult to predict whether it will take another leap forward or fall into a trap of long-term low growth.
In his inauguration speech at the BOK headquarters in Seoul on Thursday, Rhee Chang-yong projected that economic recovery will fall short of previous expectations amid growing inflationary pressure.
The new BOK chief raised the need to strike a delicate balance between growth and prices at a time when their “trade-off” is restricting management of monetary policy.
Rhee called for a bold change in the nation’s economic policy framework, in order to take a leap forward rather than veer toward a stalled growth. He added that the Korean economy should seek creative and qualitative growth led by the private sector.
To that end, Rhee believes it is necessary to push for structural reform. He said the BOK will focus on various problems that may arise in the process, including income disparity, deepening polarization and rising household and government debt.
Rhee also stressed the need for a fiscal policy and structural reform to accompany a monetary policy to overcome any mid- to long-term economic crisis.
Source: KBS World Radio