Korea may face difficulty in staying resilient to risks: BOK head
28 Apr 2014
Source: Yonhap News Agency
SEOUL, April 28 (Yonhap) -- South Korea's top central banker said Monday he was not sure that Korea's economy can stay resilient against external risks, as changes in global economic conditions and risk factors will have impacts on the local economy for a while.
"Since May last year, when global market jitters increased, the Korean economy has differentiated itself from other emerging countries in terms of its resilience in economic activities and the finance sector. But we cannot be easily confident that such differentiation can be maintained," Bank of Korea (BOK) Gov. Lee Ju-yeol said in a speech.
Lee said external risk factors included impacts of the Federal Reserve's monetary stimulus tapering on emerging countries, China's economic slowdown and the fallout from Japan's monetary easing.
The governor said it would be questionable whether the Korean economy can continue to differentiate itself from other emerging markets that suffered excessive foreign capital outflows if it does not cope with its internal imbalances.
The governor said that imbalanced growth between exports and domestic demand as well as an imbalance between the real economy and finance should be addressed.
The Korean economy's heavy reliance on exports will increase its vulnerability to external shocks, he said, and Asia's fourth-largest economy has been recovering, but its finance sector relatively lacks global competitiveness.
"Academia, the government and the central bank should make efforts to rectify such imbalances over the long term and to enhance the local economy's resilience against external shocks," Lee added.