'S Korea must create jobs, boost growth potential'

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SEOUL, Sept 4 (AFP) South Korea should focus on job creation and boosting its growth potential as it grapples with high inflation and declining domestic demand, the finance ministry said today. brTop priority should be placed on stabilising the livelihoods of ordinary people who suffer from rising prices. At the same time, efforts should be made to create jobs and boost the growth potential, it said in a monthly report. brLocal financial markets have been spooked by concerns of a big capital flight this month, when bonds worth 6.71 billion dollars held by foreigners mature. brThe Korean won closed Wednesday at 1,148.5 to the dollar, the lowest level since October 2004. brGovernment officials and the International Monetary Fund (IMF) have dismissed fears of a repeat of the 1997 fiscal crisis, saying foreign exchange reserves of some 243.2 billion dollars are enough to meet liabilities. brAmid a global economic slowdown, the government is eager to boost domestic demand. The finance ministry this week announced plans for tax cuts to stimulate private consumption and corporate investment. brThe ministry report said private-sector consumption declined 0.1 per cent in the second quarter from three months earlier, marking the first drop in four years. brConsumer confidence fell to the lowest level in almost eight years in July. brCorporate investment also remained weak. In the second quarter, corporate spending on facilities grew a mere 0.8 per cent year-on-year compared with a 1.4-per cent gain during the first quarter. brExports remained strong. The nation exported a total of 37.39 billion dollars worth of products in August, up 20.6 per cent from a year earlier.