Republic of Korea: Effective governance and fiscal management can lead to sustainable economic growth, says ESCAP report

Better governance and improved fiscal management are essential to achieve long-term economic and sustainable growth, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) says in its annual flagship publication. The Economic and Social Survey of Asia and the Pacific 2017 highlights that despite a broadly positive economic outlook for 2017, Asia-Pacific economies are vulnerable to prolonged weak external demand and rising trade protectionism.

As nations move into the second year of implementing the 2030 Agenda with the Sustainable Development Goals at its core, the region’s developing economies are projected to grow at 5.0 and 5.1 per cent in 2017 and 2018 respectively, up from 4.9 per cent last year, according to the Survey.

The projected moderate Asia-Pacific economic growth faces risks from restrained international trade through rising protectionism and global uncertainty. The Survey estimates that a steeper-than-anticipated increase in these factors could reduce average regional growth in 2017 by up to 1.2 percentage points.

The Republic of Korea maintained a stable economic growth rate of 2.8 percent in 2016, mainly driven by relatively solid performance in key industries, such as construction of residential buildings and investment in intellectual property. The growth forecast is expected to remain moderate at 2.5-2.7 percent in 2017 and 2018 with downside risks of fragile export outlook and financial volatility. According to ESCAP, proactive fiscal policy and supporting structural reforms could play a vital role in stabilizing the economy and supporting development priorities.

Launching the Survey in Seoul, Dr. Kilaparti Ramakrishna, Director and Head of the United Nations ESCAP East and North-East Asia Office, said that “The Survey advocates effective economic governance as critical to promote durable economic dynamism, social inclusiveness and environmental sustainability in the region.” He added that the topic is very timely in the context of the top priorities of the new administration and the issues that emerged at the recently concluded Presidential election in the Republic of Korea.

“The Asia-Pacific region needs to develop new economic growth strategies that do not rely on traditional export markets, but rather encourage domestic and external demand through deeper regional cooperation and integration,” said Dr. Sunghwan Shin, Chairman and President of Council on International Financial Cooperation and Korea Institute of Finance.

Korean experts highlighted the importance of improved governance and better management of public finance in Korea while noting that Korea is also in the position to share good practices to support economic growth and financial infrastructure in the Asia-Pacific region and beyond.

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For further information, please contact:
Jiwon Kim, Communications Consultant, ESCAP East and North-East Asia Office, T: (82) 32 458 6600 / E: [email protected]