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S. Korea to keep expansionary economic policy till at least 2015
Last Updated: 2014-07-28 15:33 | Xinhua
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South Korea's finance minister said Monday that the country will keep an expansionary economic policy till at least 2015 to boost the lackluster domestic demand caused by the deadly ferry disaster.

Choi Kyung-hwan, Deputy Prime Minister for Economic Affairs and Finance Minister, said at a forum that it will be necessary to maintain an expansionary policy, both fiscal and monetary, for the time being.

The minister noted that the expansionary policy will not be restricted to the second half of this year, but it should be maintained till at least next year and, if necessary, later on.

Bank of Korea (BOK) also had recognition over the need for an expansionary policy, Choi said, adding that the central bank will make an appropriate response to such recognition.

His comments came as the country's already fragile domestic demand became sour further after the deadly ferry disaster, which left more than 300 people, mostly high school students, dead or missing.

Consumers refrained from entertainment and travel after the ferry Sewol capsized and sank off the southwestern coast on April 16.

The finance ministry announced a plan last week to spend 40.7 trillion won (39 billion U.S. dollars) on fiscal and financial stimulus after lowering its 2014 growth outlook to 3.7 percent from the prior forecast of 4.1 percent.

Earlier this month, the BOK revised down its growth outlook for 2014 by 0.2 percentage point to 3.8 percent, citing weaker domestic demand after one of the country's worst maritime disasters.

The central bank was widely expected to cut its policy rate as early as in August from the current 2.5 percent, which has been kept for more than one year.

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