Too soon to end stimulus: Yoon

Too soon to end stimulus: Yoon Korean Finance Minister Yoon Jeung-hyun said Thursday curtainit is too soon for his government to withdraw fiscal and monetary policies implemented to prop up the economy.

Speaking to reporters after a ceremony launching the $1 billion Global Agriculture and Food Security Program at the U.S. Treasury Department, Yoon said, “It is premature for us to implement the exit strategies as there are concerns over possible oil and other raw materials price hikes and elements which can destabilize the international financial market.”

Yoon’s remarks follow the quarterly World Economic Outlook report, released Wednesday by the International Monetary Fund, which advised most advanced economies to maintain a “supportive thrust” this year through expansionary fiscal and low-interest rate policies to further sustain growth and employment.

The IMF called on the international community to maintain close cooperation in implementing exit strategies, saying, “Multispeed recoveries imply that policies will necessarily be tied to individual country circumstances. But there are spillovers when the timing of policy actions varies, and economies should take these into account in setting policies.”

Yoon, who arrived in Washington earlier in the day to attend a finance ministerial meeting of the Group of 20 leading and emerging economies, said that the global economy is still being supported by government spending rather than the private sector.

“It is true that Korea has witnessed an improvement in economic indicators and is recovering faster than other countries,” he said. “However, we still cannot say that the private sector has recovered its self-supporting power, and we have difficulty in employment.”

The IMF has projected Korea’s economy to expand 4.5 percent this year and 5 percent next year due to robust exports, growing domestic demand and inflows of foreign investment. Yonhap

Yoon Jeung-hyun, center, Korea’s finance minister, gives a speech at the U.S. Treasury Department, Washington, in a ceremony launching the $1 billion Global Agriculture and curtainFood Security Program. Korea is the founding donor of the program.