1. Current economic trend

    Korea’s economy has continued to enter into a full-fledged recovery phase, backed by robust domestic demand and exports amid global economy recovery. Mining and manufacturing production in February rose 3.6 percent month to month and 19.1 percent year to year. The trade account in March recorded a surplus of 2.19 bil-lion dollars, affected by rising exports amid recovering emerging market demand. CPI in March recorded a 2.3 percent growth rate, down from the previous month (2.7 percent), mainly led by the stabilized service prices. The labor market-related indicators in February appear to show signs of a moderate recovery in employment.

    2. Fiscal policy in the post financial crisis period

    In an effort to stabilize the economy, the Korean government will continue expan-sionary fiscal policy while enhancing the country’s capacity to deal with external influences. The government will renew policy efforts to restore fiscal soundness and implement restructuring of revenue and expenditure to cope with compulsory challenges such as pension and health care. In addition, it is necessary to strengthen the National Assembly level control over fiscal expenditure to improve fiscal sus-tainability.