South Korea's finance minister said Monday that the country has a low possibility of falling into an economic crisis in the coming months despite rising concerns over a slew of financially weak firms and increased currency volatility.
"There is little possibility that the South Korean economy will experience a critical situation like the 1997 Asian financial crisis and the 2008 global financial crisis," Finance Minister Yoo Il-ho said at a conference in Seoul.
His comments came after some media reports cautioned that Asia's fourth-largest economy may fall into an economic trouble in April.
Daewoo Shipbuilding & Marine Engineering Co., a major shipyard here, has 440 billion won (US$383 million) in debt due in April, and there are concerns that the shipbuilder will hardly afford to pay the debt amid the dearth of new orders and a delay in the delivery of drill ships.
Also, the U.S. government is expected to unveil a list of currency manipulators in April, which may include South Korea along with China.
South Korea was put on a monitoring list by the U.S. Treasury Department last year due to a significant bilateral trade surplus with the United States and evidence of market intervention.
"The South Korean government has never intervened in the market," said Yoo. "We are now on a monitoring list, but we are also preparing for many possibilities."
The country posted $23.3 billion in trade surplus with the U.S. last year, accounting for 26 percent of the country's total trade surplus.
Meanwhile, Vice Finance Minister Song Eon-seog also said the concerns over the April crisis are "excessive," as some economic data show positive signs.
"Some media report on economic pessimism these days, but I don't think our economy is heading toward that direction," he said in a briefing in Sejong. "Private consumption is sluggish but facility investment and exports are picking up."
Song, who handles budget and fiscal affairs at the finance ministry, said the government will consider drawing up a supplementary budget after looking into the first-quarter data.
The South Korean government came up with a 400 trillion won budget for 2017 and plans to spend some 70 percent of its earmarked budget in the first half to prop up the economy. But many economists call for stronger fiscal intervention, like a supplementary budget, as soon as possible to stimulate the economy before it falls into a deep slump. (Yonhap)