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S. Korea finance chief warns impeachment could hinder growth

Reporter: Jack Barton 丨 CCTV.com

12-12-2016 10:31 BJT

The ongoing political turmoil in South Korea adds a further blow to an economy that is struggling to get back on its feet. It has been a tough year for some of South Korea’s biggest firms, such as Hanjin shipping, which went bust, and Samsung with its self-combustible Note 7 handsets.

The nation’s sluggish economic recovery is again slowing. But the country’s finance minister says the biggest negative economic impact stems from the corruption scandal surrounding many big firms and president Park Geun-hye, whose potential impeachment is currently under review by the constitutional court.

“This political situation is further weighing on the economy and a downturn in sentiment could be another problem. This is likely the biggest economic hurdle the political issue at hand could bring about,” said Yoo Il-Ho, South Korean Finance Minister.

Park had planned to launch a stimulus plan. Instead South Korea has been plunged into economic and political paralysis. The president’s critics want that paralysis to end.

“If Park Geun-hye doesn’t step right down right now it will be the most chaotic government we have ever had,” said Kim Hwan-Young, anti-Park protester.

In November consumer sentiment hit its lowest level since the Asian financial crisis.

“The negative impact of all these turmoil’s, with big companies also political scandals is actually a huge negative impact on the economy and I think Korea will not be able to reach its forecast economic growth rate this year,” said Kim Bowon, professor of Kaist Business School.

The constitutional court has six months to review the president's impeachment during that she has immunity from prosecution.

If Park is impeached, new elections will be held within two months. If she is cleared of all charges the country will have to limp on under a president with the lowest popularity ratings ever for a South Korean leader.

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