Seoul, Dec 30 (IANS) South Korea’s financial watchdog said Friday that it will place its top priority for 2012 policy on financial market stability in a bid to preemptively respond to the possible market turmoil from Europe’s debt crisis and global economic downturn.
In its 2012 policy report, the Financial Services Commission (FSC) vowed to take proactive action against potential risk factors at home and abroad such as the European fiscal crisis, change in political situation of North Korea and the nation’s huge household debts, said Xinhua.
The watchdog expected the global economy to show slower growth next year amid the persistent European debt problems, resulting in weaker economic growth in South Korea.
According to the International Monetary Fund (IMF), the global economy was projected to post an annual growth rate of 4 percent next year, with the estimated figures for eurozone and China decreasing to 1.1 percent and 9 percent in 2012 from 1.6 percent and 9.5 percent estimated for 2011.
In the financial sector, market volatilities may deepen at home and abroad next year, the watchdog said, adding that uncertainties remained over the contagion of the European debt crisis to the region’s banking sector and the capital outflow of European investors from the local financial market caused by their deleveraging.
FSC Chairman Kim Seok-dong told reporters at a seminar held Tuesday night that the South Korean economy will possibly be far worse than most imagined next year amid lingering uncertainties over the European fiscal crisis.
