Reforms Ambitious, But Bode Well For Growth
BMI View: While the prescribed targets laid out in South Korea president Park Geun-hye's economic reform plan may appear overly ambitious, the proposed drive towards deregulation and support of the services sector, if realised, will provide the Korean economy with new pillars of economic growth and set the country on a more sustainable path of economic expansion. Also, the planned pullback the public sector's involvement in the economy will aid not just in growth of the private sector, but also help to improve the government's fiscal profile.
South Korea president Park Geun-hye unveiled an economic reform plan on February 25, which she hopes will reinvigorate South Korea's slowing economy. Dubbed the '474 Vision', Park hopes the overhaul will help the economy to achieve 4% real GDP growth, a 70% employment rate and US$40,000 per capita income. With the exception of the per capita target, Park is aiming to achieve her other two targets by 2017. The essence of the plan is three-fold: allow the private sector to play a bigger role in driving the economy, reorient the economy towards services from manufacturing and away from exports and towards domestic consumption.
Focus On The Means, Not The End
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