By Kim Jae-kyoung
Staff Reporter


The nation’s per capita national income is expected to reach $16,000 this year and $18,000 by 2007, boosted by stronger economic growth, Finance-Economy Minister Han Duck-soo said Thursday.

Han said that stronger stock market, stable consumer prices and recovering domestic demand will help boost the nation’s per capita income. Per capita national income was $14,162 last year.

During a parliamentary interpellation session later in the day, Han also said that the government will maintain the current expansionary macroeconomic policies next year to achieve the 5 percent growth.

``We need to review the current economic policies now, but I don’t think that economic growth has recovered to the potential growth level,’’ he said. ``Business and consumer sentiment still remains weak due to high oil prices and economic polarization.’’

``It is necessary to maintain the current economic stimulus policy next year, though it will not be as expansionary as it has been this year,’’ he said, adding that the government will not change the course of its macro policy.

He forecast that the economic growth will reach the 6 percent level next year, buoyed by recovering private consumption and solid exports growth.

Han, who is also a deputy prime minister, said that the government will never adopt any tax cut plans that have a negative effect on national budget.

``A tax break is a policy used when the government has sufficient budget or a taxation system needs reform because tax rates are too high, but we don’t have sufficient tax revenues now,’’ he said.

He pointed out that a large-scale tax cut policy is incompatible with fiscal expenditure.

His remarks came in response to the opposition Grand National Party (GNP)’s strong calls for the government to lower taxes to help improve the livelihood of ordinary people and small companies.

In the meantime, the finance ministry said that the economic growth will be in the upper half of the 4 percent range in the fourth quarter, helped by a recovery in private spending and corporate expenditure.

It added that the economy seems to have bottomed out in the first half, and its growth rate will accelerate to the growth potential of 4 to 5 percent in the near future.

Still, the ministry warned that there are still downside risks such as high oil prices and a slowdown in the U.S. economy.

kjk@koreatimes.co.kr