South Korean Finance Minister Lowers 2013 Growth Expectations

South Korea's new finance minister has warned that the country's economic growth could be weaker than expected in 2013, indicating that the government might initiate the much-anticipated stimulus measures soon.

"Given the current trend of growth, the possibility of the nation's economy growing less than forecast is very high," South Korean Minister of Strategy and Finance Hyun Oh-seok told reporters, according to the Wall Street Journal.

"That's why we're preparing comprehensive economic boosting measures".

In December, South Korea had said that its economy could expand at 3 percent in the current year after the 2.1 percent growth recorded in 2012.

The minister, who formally took office this week, had earlier said that the government will announce stimulus plans as early as next week, suggesting that it will make every effort to bring the economy to growth track.

South Korea has been going through a rough patch of late, as the weak external demand triggered by the global economic slowdown hurt the country's export driven economy. Its shipments have remained lacklustre in January and February while factory output has disappointed.

Labour market data released this month had shown that unemployment rate increased to 3.5 percent in February from the 3.2 percent recorded in the previous month. Stock markets too have struggled, with the benchmark KOSPI index retreating about 2.4 percent in the year-to-date.

Analysts add that the recent measures from Japanese government to lower the value of yen and boost exports have also hit South Korean economy.

But despite the struggling conditions, Bank of Korea had refrained from further policy rate cuts for the fifth straight month at its latest policy meet, maintaining it at 2.75 percent. The central bank may now look to ease the rate in the coming meetings, in tandem with government's efforts to boost the economy.