2018年-IMF国际货币组织全球_Republic_of_Korea_2017_Article_IV_Consultation_55页_1mb

2017 Article IV Consultation Summary: Republic of Korea

Core Content

The 2017 Article IV consultation by the International Monetary Fund (IMF) with the Republic of Korea concluded that the country's near-term economic outlook is improving, with a cyclical recovery in progress. Despite recent geopolitical tensions, the economy has shown resilience, driven by strong investment in IT and construction, increased export growth due to favorable global conditions, and a rebound in inflation toward the Bank of Korea's 2% target. However, long-term growth challenges persist due to structural issues, demographic pressures, and slowing productivity.

Main Views

• Economic Recovery: Korea experienced a rebound in GDP growth, reaching 3.2% in 2017 and projected at 3.0% in 2018. Investment, particularly in IT and construction, was a key driver.
• Inflation: Headline inflation rose to around the 2% target in 2017, but showed volatility. Core inflation remained below the target, reflecting the negative output gap.
• Current Account: The current account surplus narrowed in 2017 to 5.6% of GDP, down from 7% in 2016, but is expected to remain substantial in the medium term.
• Unemployment: The overall unemployment rate is around 3.8%, but youth unemployment remains significantly higher at 10.0%.
• Fiscal Policy: The fiscal stance is tight, with a structural budget surplus of 1.4% of GDP in 2017. While fiscal space is ample, the authorities are cautious about increasing public expenditures.
• Monetary Policy: Monetary policy remains accommodative, with lending rates and long-term yields near record lows. The IMF recommends enhancing policy credibility through clearer communication of the Bank of Korea's (BOK) policy reaction function.
• Financial Stability: High household debt (above 90% of GDP) is the main financial stability risk, though macroprudential policies are helping to contain this risk.
• Structural Reforms: The IMF emphasized the need for structural reforms to address labor and product market duality, boost productivity, and promote inclusive growth.

Key Information

Economic Indicators (2014–2018)

Policy Recommendations

• Fiscal Policy: Shift to a more expansionary stance to support the recovery and rebalance the policy mix. Use fiscal resources to enhance the social safety net and support employment.
• Monetary Policy: Maintain an accommodative stance, with a focus on inflation control. Improve communication of the BOK's policy intentions.
• Exchange Rate: Allow the exchange rate to remain flexible, with limited intervention.
• Financial Stability: Continue macroprudential measures to address household debt and ensure financial system resilience.
• Structural Reforms: Implement "flexicity" in the labor market to enhance flexibility for regular workers, provide a strong and inclusive safety net for the unemployed, and promote active labor market policies. Focus on increasing female labor participation and youth employment.
• Productivity: Ease regulatory burdens, especially in the service sector, and promote innovation and growth in SMEs. Better design and coordinate R&D support.

Risks and Challenges

• Demographics: Korea's working-age population is expected to decline, which will depress potential employment and growth.
• Productivity Growth: Slowing productivity growth is a key constraint on long-term potential growth.
• Income Inequality: Income polarization and inequality are worsening, with a Gini coefficient rising to 0.304 in 2016.
• Social Protection: Inadequate social protection and labor market duality are contributing to inequality and lower productivity.
• External Imbalances: The current account surplus remains high, with risks of overvaluation and potential adjustment pressures.

Conclusion

The IMF Executive Board welcomed Korea's economic recovery and acknowledged the need for structural reforms to address long-term challenges. The report highlights the importance of a balanced macroeconomic policy mix, with a focus on fiscal expansion, monetary accommodation, and structural changes to promote inclusive and sustainable growth.