National audit of Bank of Korea by fiscal and economic planning committee
Fiscal plan seen adding 0.5% to GDP growth
Bank of Korea Gov. Shin Hyun-song said Monday that the government's fiscal plan is expected to add 0.5% to GDP growth, with the additional inflationary impact estimated at 0.06%.
Shin made the remarks during the morning session of the National Assembly's fiscal and economic planning committee national audit of the Bank of Korea, responding to questions from People Power Party lawmaker Lee Jong-wook about the controversy over a mismatch between fiscal and monetary policy. "We are verifying this through models," he said.
When Lee noted that the fiscal stance poses a short-term burden on prices and money supply, Shin agreed but repeated his position that the apparent mismatch may not hold over the medium to long term. "If potential growth rises, it may no longer be a mismatch," he said.
Shin added that because some spending items are transfer payments — which carry a relatively low fiscal multiplier — there is room to further assess whether the budget would add meaningful upward pressure on inflation. "At around 0.06%, it is not particularly large," he said.
kimstar@heraldcorp.com
