A new economic team working directly under President Park Geun-hye is set to launch this
Wednesday.
The team is tasked with boosting public spending and getting Korea out of its low-growth trap.
For more on how they hope to do that, our Hwang Ji-hye reports.
Korea's new economic team,... which will be led by incoming finance minister Choi Kyung-hwan,
has one goal -- to spur growth.
To achieve it,... the team is expected to first fiddle with the nation's real estate
market.
Officials at the finance ministry say... a set of economic policies for the second half
of this year is expected to include measures...
like easing loan-to-value ratio limits for mortgage lending to 70 percent.
That means... home buyers would be able to borrow up to 140-thousand U.S. dollars when
buying a house worth 200-thousand dollars.
The current loan-to-value ratio stands at 50 percent for those living in the nation's
capital area,... which allows them to borrow just 100-thousand dollars when purchasing
the same house.
Home buyers who are short of cash... typically are forced to borrow money from non-banking
financial institutions... that charge them higher interest rates.
Economic policymakers expect people moving their loans from non-banking lenders to banks
to spend more,... which would also lead to pulling the country out of its sluggish domestic
demand trap.
While many are concerned... that easing housing loan regulations could lead to more household
debt,... which already hovers around 980 billion dollars,... the nation's real estate market
is welcoming the government's expected move.
"Easing regulations won't really lead to more household debt because there aren't a lot
of speculative investments in the real estate market these days."
Economists still add... that the government should also set up countermeasures to address
the side-effects that could occur from easing housing loan regulations.
Hwang Ji-hye, Arirang News.