WASHINGTON: South Korea's economy will maintain its fast recovery and the U.S. unwinding of its stimulus measures even adds to the optimism because it suggests exports will grow, the South Korean finance minister told Reuters on Friday.
A spike in the amount of long-term external debt was not a source of concern but was "natural" in line with the expanding size of the Korean economy and was instead a sign of improving investor confidence in South Korea, he said.
"On the one hand the QE tapering could hint at the recovery of the U.S. and the global economy, meaning that Korea could see a rise of demand for exports," Finance Minister Hyun Oh-seok said in an interview on the sidelines of the International Monetary Fund and World Bank annual meetings.
On the other hand, he said, the U.S. tapering from its quantitative easing, or QE stimulus packages, could lead to rising market interest rates first in the United States and then in other countries.
He did not see it as a threat to economic growth.
South Korea's economy, the fourth-largest in Asia, is on course for growth of about 4 percent this year from 3 percent last year and was supported in part by solid employment against a backdrop of still weak exports.
"In February alone it has seen an increase in job positions of 830,000 (compared with a year earlier)," said Hyun, who is also South Korea's deputy prime minister. South Korea saw both job market participation and employment rates grow in each of the past 10 months over the year earlier.
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