Anchor: A team from the International Monetary Fund(IMF), which recently carried out a two-week assessment of the economic situation in South Korea urged the Moon Jae-in administration to prepare for obstacles along the path of the country's economic development.
Choi You Sun reports.

Report: Wrapping up its annual meetings with policymakers in South Korea on Tuesday, a team from the International Monetary Fund(IMF) advised Seoul to take policy measures to mitigate short to long-term backlash in the midst of its growth process.

The IMF said the South Korean government will need to enforce expansionary policies including drawing up a considerable supplementary budget and that the country's central bank should ease its monetary policies.

In a meeting with Finance Minister Hong Nam-ki on Monday, the IMF's Korea mission chief Tarhan Feyzioglu expressed the IMF's concerns over the current pace of minimum wage hikes in the country.

Following the biggest wage hike in nearly two decades of 16-point-four percent to seven-thousand-530 won per hour in 2017, the Moon Jae-in administration pushed for another hike of ten-point-nine percent to eight-thousand-350 won at the beginning of this year.

President Moon is seeking to raise the minimum wage to 10-thousand won by 2020 to fulfill his key election pledge.

The rapid hike has sparked strong backlash from businesses, especially small businesses and self-employed shop owners, who have complained about ballooning labor costs.

The Finance Ministry said the IMF official also stressed the need for South Korea to strengthen "flexicurity" in the labor market, adding that a fund to stabilize the job market should be directed towards new businesses and startups to help raise their productivity.

Flexicurity is a term coined in Denmark that combines flexibility with security in dealing with the job market and unemployment benefits.

In response to the IMF's concerns, Hong said South Korea will strengthen its flexicurity and pursue active labor market policies, while explaining Seoul's efforts to boost economic vitality centering on the private sector.

The IMF team, meanwhile, gave high marks to the country's "strong fundamentals," citing low public debt, a strong manufacturing base and ample foreign exchange reserves.
Choi You Sun, KBS World Radio News.