IMF warns against delayed restructuring in Korea

The International Monetary Fund (IMF) has warned that if Korea drags its feet in corporate restructuring, the nation could face another economic crisis.

The Financial Times reported Tuesday that the IMF said in a report that Korea had failed to restructure its economy and warned that if ongoing corporate sector restructuring fails, it could endanger the recovery progress the country has already made.

The IMF emphasized that the Korean government should produce visible results in the restructuring of the corporate sector, such as forcing out nonviable companies and selling off assets through financial sector reforms.

The IMF said that the Korean economy had recently slowed down and that the number of insolvent companies is expected to grow next year. The insolvent companies are acting as an obstacle to economic reforms owing to their links to political circles and this serves only to aggravate their problems, the IMF said.