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South Korea's Moon replaces economic policy aides as trade war bites

Published 06/20/2019, 11:30 PM
© Reuters. South Korea's president meets Swedish PM Stefan Lofven

By Choonsik Yoo

SEOUL (Reuters) - South Korean President Moon Jae-in sacked both of his top economic policy aides on Friday as Asia's fourth-largest economy cools sharply due to prolonged Sino-U.S. trade frictions.

Moon appointed Korea Fair Trade Commission Chairman Kim Sang-jo as his chief policy secretary and First Vice Finance Minister Lee Ho-seung as his top economic policy secretary, the presidential office said.

They replace Kim Soo-hyun and Yoon Jong-won.

The government's management of the economy came under criticism from opposition parties and investors, but the new appointments fell far short of indicating any major shift in policy.

"There has been criticism about the way policies are executed and so today's appointments appear to be more aimed at speedier implementation of policies than at changing policies," said Choi Seok-won, head of research at SK Securities.

Local markets showed a muted reaction to the appointments.

South Korea's economy surprisingly contracted by 0.4% in the first quarter from the previous quarter, and some global investment banks see full-year growth falling from 2.7% last year to below 2%, which would be the worst pace since 2009.

The government has drafted a supplementary budget in April to boost the economy, but the main opposition party has refused to review it, demanding the government first acknowledge the failure of its economic management.

The government has said the slowing economy was more a result of cooling global trade amid the Sino-U.S. trade dispute, which has caused South Korea's exports to fall for the past six months in a row in annual terms.

© Reuters. South Korea's president meets Swedish PM Stefan Lofven

Provisional data released by the customs agency early on Friday indicated exports were likely to fall again this month, as overseas shipments for the first 20 days of this month fell by 10.0% from the same period of 2018.

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