The Year`s Growth Rate Adjusted to Five Percent from Four Percent

The government officially adjusted this year`s forecasted economic growth rate from the original more than four percent to five percent range, reflecting recent economic recoveries. However, the government decided to use cooling measures on some overheated sectors such as properties market and household loans while maintaining the basic frame of macro economic policy direction.

The government decided these and other things in an economic policy coordination meeting under the chairmanship of deputy prime minister and minister of the Ministry of Finance and Economy, Jin Nyum, in Kwacheon governmental building on April 12

Deputy Prime Minister Jin explained the background of the growth rate hike,`The domestic demand is getting better with increased activities in constructions and sales increase in wholesale and retail sectors, and continuous increase of industrial production, and furthermore the export is expected to pick up speed beginning in April.`

However, the government decided to preserve the mainframe of the policy direction since the international oil prices go up due to the unstable Middle East situations and the recovery speed of the U.S. economy is uncertain. The target of consumer price increases of two to four percent and the current account surplus forecast of four to five billion dollars are also strictly adhered.

But the governmental finance will be elastically allotted in accordance with the economic situations, and some cooling economic policies are to be adapted for some overheated economic sectors such as household loans and real estate market.

In relation to the hikes of lease and rent rate, the government decided to revise related clauses within this month so that tenants may receive loans of up to two times of his annual income when tenants submit to the housing guarantee fund a promissory memo of the house owner guaranteeing the return of deposit money.

Until now the benefit was applicable to a poor household of annual income of less than ten million Won.

In addition to that, the mid and long term housing construction plan is to be determined till June, and weekly check of housing markets on capital metropolitan areas will be conducted, and additional anti-speculation measures will be taken when overheating phenomenon appears again.

Rae-Jeong Park ecopark@donga.com · Joong-Hyun Park sanjuck@donga.com