Address inflation, with the interest rate

Reference no: EM133637329

Economics

Assessment Description

This assessment consists of two activities.

Activity 1: Group Case Study

Before Week 12 you must form groups of 4 to 5 students.
At the beginning of class your lecturer will distribute a question made up of 4 to 5 parts to each group. The questions will be based on Topics 7 to 11.

You will then be given 60 minutes to complete the questions in your group (you may wish to allocate a question to each group member).
Details on how the activity will be distributed and collected will be given closer to the test.

South Korea should maintain current monetary, fiscal policies, IMF says

SEOUL, Sept 6 (Reuters) - South Korea should maintain current, restrictive monetary and fiscal policies as it needs to take steps to return to sustainable finances and address inflation, the International Monetary Fund (IMF) said on Wednesday.

"The monetary policy rate should stay above neutral for the time being to address inflation, with the interest rate path remaining data dependent," the IMF said in a statement concluding its two-week long visit to the country.

Harald Finger, Korea Mission Chief of the IMF, said, "Moderate consolidation (of the 2024 government budget) will help limit public debt and, at the same time, will support monetary policy in efforts to contain inflation."

Instead of undermining economic growth, the prudent fiscal policy is judged to be instrumental in keeping South Korea's economic fundamentals strong in the medium term, Finger said at a press conference.

Last month, the South Korean government proposed to raise budget spending for 2024 by the lowest rate in two decades, prioritising fiscal discipline amid weakening tax revenue due to slower economic growth.

The Bank of Korea held interest rates steady for a fifth straight meeting in August, in a balance between softer inflation and heightening risks to growth.

"We do see a moderate increase in downside risk for Korea's growth, especially in 2024, with China's renewed slowdown," Finger said, also pointing out China's policy measures to mitigate economic slowdown and other positive factors such as the resumption of Chinese group tourism.

In July, the IMF forecast Asia's fourth-largest economy to grow 1.4% in 2023, a three-year low after expansion of 2.6% in 2022 and 4.3% in 2021. It expects the economy to grow 2.4% next year.

Finger told reporters the IMF decided not to evaluate South Korea's foreign exchange reserve adequacy based on its Assessing Reserve Adequacy (ARA) metrics from July.

The measure is mostly for emerging economies, and given its economic characteristics, it is more appropriate to assess South Korea's on a scenario basis, Finger said.

Reporting by Cynthia Kim and Jihoon Lee; Editing by Jacqueline Wong and Christopher Cushing.

Attachment:- Economics.rar

Reference no: EM133637329

Questions Cloud

Machine learning/ai for a business problem : Develop a real-world Machine Learning or AI project plan/proposal based on the learnings from the subject - benefits for the organisation

About maximum willing to buy-maximum reservation price : Which of the following statements are true about Maximum Willing to Buy (MWB) and Maximum Reservation Price (MRP)?

Response of governments to economic downturn : Why did the response of governments to the economic downturn caused by the covid-19 pandemic differ from their response to the financial crisis of 2008?

Specific recommendations for your organisations actions : Specific recommendations for your organisations actions in using social media techniques to respond to the data breach and manage the resulting crisis

Address inflation, with the interest rate : Address inflation, with the interest rate path remaining data dependent," the IMF said in a statement concluding its two-week long visit to the country

Firm acts as profit-maximizing monopolist : Consider a market structure where there is only one refined cobalt cube producer. This firm acts as a profit-maximizing monopolist.

Observations in market for juice? oranges : Content area left Part 1 Simplest Possible Graph. Consider the following table of observations in the market for juice? oranges.

Explain drawing on lee buchheits comments : Explain drawing on Lee Buchheit's comments how the Latin American debt crisis of the 1980s was different from that facing Emerging Markets today.

Market effects of changes in income : Decrease in income. An inferior good is the opposite of a normal good. Consumers buy larger quantities of inferior goods when their income decreases.

User Account

All Pages