(Tax Finance News = Reporter Ko Seung-joo) The government raised the target for this year’s economic growth rate by 1 percentage point from 3.2% to 4.2%.
The consumer price inflation estimate was adjusted from 1.1% to 1.8%, and the increase in the number of employed persons was also adjusted from 150,000 to 250,000.
Hong Nam-ki, Deputy Prime Minister and Minister of Strategy and Finance, said at the ‘Joint briefing of related ministries for economic policy direction for the second half of 2021’ held at the government complex in Seoul on the 28th.
Deputy Prime Minister Hong predicted that the spread of COVID-19 and the speed of vaccination will be the most important variables for the situation in the second half of this year, but overall, the Korean economy will continue to recover mainly from exports and investment based on the V-shaped recovery and rebound of the global economy. did.
Depending on what happens in the second half of the year, the complete economic recovery after the COVID-19 crisis and the return to a complete normal life will be different. He also pointed out that it is a more important turning point than ever in that it is the time to determine the root of future-leading strategies such as the Korean version of the New Deal and carbon neutrality.
The government selected ‘complete economic recovery’ and ‘a major structural change to a leading economy’ as the policy goals of the economic policy in the second half of the year. To this end, 132 major policy tasks will be identified and intensively pursued.
Deputy Prime Minister Hong emphasized that he will strive to achieve an annual growth rate of 4.2%, the highest growth in 11 years, employment by 250,000 people, exceeding the 220,000 decrease in employment last year, and exporting to an all-time high of over $600 billion.
Regarding the Bank of Korea’s hint of an interest rate hike within the year while the government maintained expansionary fiscal policy, he said, “Fiscal policy and monetary policy do not always go in one direction. ) is also an important policy area,” said Deputy Prime Minister Hong.
Regarding inflation concerns due to increased fiscal spending, they answered that there is a significant negative GDP gap on the demand side, and that private transfer expenditures used in supplementary budget projects have a relatively low fiscal multiplier.
The ripple effect of fiscal spending on inflation usually takes place over two years, so the impact on inflation in the second half of this year is not large.
Deputy Prime Minister Hong emphasized that he will do all he can to control and manage the inflation rate at the 1.8% level suggested for this year.
[조세금융신문(tfmedia.co.kr), 무단전재 및 재배포 금지]