[THE INVESTOR] Finance Minister Yoo Il-ho said on Oct. 14 the government will maintain a pro-growth fiscal policy amid worries that the economy may fall into a drawn-out, Japanese-style slump.

“(The government) has worked hard so far to implement an expansionary fiscal policy, and it will continue to do so down the road,” he said during a parliamentary audit session at the National Assembly.

He was responding to a lawmaker’s question about IMF chief Christine Lagarde’s comments on the South Korean economy earlier this month

She singled out South Korea, along with Germany and Canada, as countries that have “fiscal space” and can take stimulus actions to help revive the global economy.

The minister pointed out that the low-growth trend of South Korea‘s economy is likely to last longer than initially thought.

Speaking separately to lawmakers during the session, Lee Ju-yeol, governor of the Bank of Korea, agreed that it’s difficult to expect a high growth rate, given the number of challenges at home and abroad.

The BOK chief said the 2 percent-range forecast is “not far off the mark” from the nation’s economic growth potential, saying its potential growth rate is on the steady decline.

(theinvestor@heraldcorp.com)