Data released by the central bank Friday showed Korea’s economy expanded by 3.3 percent last year, a slight improvement on the 3 percent growth in 2013.

Economic policymakers here are in no position to be complacent about this performance just because it matched the global growth rate in 2014. Despite two stimulus packages worth 46 trillion won ($42.5 billion) coupled with two rounds of interest rate cuts, Asia’s fourth-largest economy failed to achieve its annual growth target of 3.9 percent.

Especially worrisome was that Korea’s economy expanded at the slowest pace in more than two years in the final quarter. According to the Bank of Korea data, its on-quarter growth stood at 0.4 percent during the October-December period ― the lowest since the third quarter of 2012. Manufacturing production and exports shrank for a second straight quarter in the three-month period. Private spending rose by 0.5 percent in the fourth quarter, slowing from a 1 percent gain three months earlier. During the year, private expenditure grew by 1.7 percent, the lowest since the 2007-08 global financial crisis.

Amid uncertain economic conditions at home and abroad, most local companies have remained cautious about increasing investment.

Worries about Korea’s economic prospects were deepened by the central bank’s recent move to slash its growth outlook for this year to 3.4 percent from 3.9 percent. BOK officials said the downward revision was mainly due to exceptional factors, including a fall in consumer spending following tightened regulations on smartphone subsidies, and did not necessarily reflect a pessimistic view of the economy.

Still, economic growth may continue to weaken this year as domestic consumption remains sluggish and overseas demand for Korean products is decreasing, particularly in China, which accounts for more than a quarter of the country’s exports.

In these unfavorable conditions, the government is running out of fiscal means to stimulate the economy with tax revenues having fallen short of targets in recent years. The lackluster growth in the final quarter of last year was due partly to the slower pace of increases in government spending. Fiscal expenditure grew by 0.5 percent on-quarter in the period, down from a 2.3 percent gain in the previous quarter.

Government policymakers and central bankers now need to depart from traditional approaches to reinvigorating the economy. Last year’s stimulus package, including measures to help boost property markets and infrastructure construction, have been inefficient, failing to achieve the targeted growth goal.

More flexible and coherent policies should be implemented to increase consumer spending and corporate investment. It was inexcusable that the revised taxation scheme resulted in middle-income workers paying additional taxes, further dampening consumption expenditure. Deregulation efforts should be accelerated to help promote investment particularly in service sectors, which would lead to creating more well-paying jobs.

Expanded welfare benefits need to be readjusted and public sector reforms should be undertaken without delay to avoid inefficient fiscal spending standing in the way of boosting growth momentum.

What may also be required to bolster economic recovery is a bolder interest rate policy. It is understandable that growing household debt has kept the central bank cautious about further cutting the key base rate, which has stood at a record low of 2 percent since October. But the BOK seems to have some leeway to lower the rate as its latest inflation estimate of 1.9 percent for this year falls below its target band of 2.5-3.5 percent.

Prime Minister-designate Lee Won-koo was right to say after his nomination by President Park Geun-hye on Friday that he would devote himself to reviving the economy. The former ruling party floor leader noted that only politicians seemed unaware people were suffering from deteriorating economic conditions. After passing a parliamentary confirmation vote, he will have a long to-do list, but his success as prime minister may ultimately depend on how effectively he contributes to consolidating the foundation for steady growth.