(LEAD) Finance minister stresses measures to reignite economy

(ATTN: UPDATES with more details, comments in paras 8-11; ADDS photo)

SEOUL, Oct. 31 (Yonhap) -- South Korea's finance minister on Friday said efforts to reinvigorate the economy are in the early stages and stressed more action is needed before the general public can feel tangible results.

In a letter sent to ministry employees, Choi Kyung-hwan compared the current state of affairs to the ignition being turned on to get the economy back on its track and that the journey still lay ahead.

"Bills aimed at revitalizing the economy have run into obstacles and business investment and consumer spending have not picked up pace," the official said.

The Bank of Korea said last week that the national economy will grow 3.5 percent this year, down from 3.8 percent previously anticipated.

Choi said that while domestic conditions have not improved, external factors that impact the South Korean economy are deteriorating quickly.

To overcome such challenges, he urged ministry staff to focus on implementing policy measures and to make certain they run smoothly. He said everyone needs to do their part to get bills passed through parliament and respond quickly to external risks.

"On the up side, alarm bells sounded by the ministry have raised awareness among various economic actors to make them respond to challenges," the minister said. He said such awareness has triggered changes for the better.

Speaking to reporters after attending a job fair for public organizations earlier in the day, Choi said he was looking at various options to minimize any cuts in government spending in the last months of this year. Any drop could have a negative effect since the country is not expected to meet the previously set growth target.

"For now the goal is to do whatever is possible to get the economy moving forward so goals can be met," he told reporters.

On the recent decision by the U.S. Fed to halt quantitative easing, Choi said the action was long expected by the market. He added that the government is keeping close tabs on the financial market at large and the U.S. currency and monetary policy in particular.

Since Choi took office nearly four months ago, he has been calling for extensive measures to be taken to revive the economy through expansionary spending. This stance, however, has been receiving flak for not producing the sought-after results.

He had pushed up budget spending and eased real estate market regulations in attempts to fuel domestic consumption, but external developments such as unfavorable exchange rates and recovery slowdown in major economies have taken the edge out of his policies, along with a slow response in the domestic market.

yonngong@yna.co.kr
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