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South Korea fin min says recovery sluggish, fiscal conditions challenging
[SEOUL] South Korea's recovery has lost momentum from declines in production and consumption while exports show no sign of improving, adding pressure on the government's welfare and job creation spending, finance minister Yoo Il Ho said on Tuesday.
"External factors including jitters in financial markets and the slowing down of the global economy have increased the uncertainties in the path of our economy," Mr Yoo said in an opening speech for a regular meeting in Seoul to discuss fiscal spending.
"We cannot be optimistic about our current situation, but we must use positive signs as opportunities for a rebound."
Tuesday's comments were more pessimistic than some recent remarks, in which Mr Yoo has insisted the economy was getting by with no need for a supplementary budget.
"Our tax revenue situation is improving somewhat, but we cannot be assured at this point due to heightening uncertainties in the global economy," the minister said.
Mr Yoo said government finances were further burdened by the increasing need for welfare spending, and investment to foster job creation and new sources of economic growth.
South Korea's unemployment rate spiked in February to its highest in six years, data showed last week, and the government has said it would announce measures to boost youth and female employment in April.
A majority of analysts in Reuters' poll earlier this month saw the Bank of Korea lowering interest rates as soon as April to tackle slowing recovery, following on from four rate cuts implemented from 2014 to last year.
The base rate currently stands at a record low of 1.50 per cent.