(Bloomberg) -- South Korean President Moon Jae-in designated a long-time public official as his new finance chief to replace Kim Dong-yeon amid a slowdown in growth in Asia’s fourth-largest economy.
Moon nominated Hong Nam-ki as finance minister and deputy prime minister. Hong has long served in public posts, including director-general at the finance ministry and senior secretary to the president for policy coordination, the presidential office said.
Kim took on the position of finance minister in June 2017 shortly after Moon came to power with a pledge to create jobs and raise income levels for regular workers. While Kim’s term was not unusually short, with one to two years being the norm for this role in South Korea, he had contradicted the presidential office on the impact of wage policies.
The nomination comes after a deceleration in economic growth that may be giving policy makers second thoughts about the prospects of near-term rise in interest rates. Slower growth is also adding to pressure on Moon amid criticism that his moves to bump up the minimum wage are hurting employment.
The economy grew just 2 percent year on year in the July-September quarter, its slowest pace of expansion since 2009. The slower-than-expected growth makes a 2.9 percent government target for 2018 more difficult to achieve. Moon’s administration had already trimmed its growth projection for the year and a target for job creation.
Hong will assume the leading role in Moon’s cabinet as it struggles to tackle challenges including youth unemployment, high levels of household debt and the potential fallout of the U.S.-China trade war on Korea’s export-dependent economy.
Separately, the presidential office also named senior secretary Kim Soo-hyun as the president’s chief of staff for policy, replacing Jang Ha-sung.
Jang has been under growing pressure to resign as Moon’s key economic initiatives faced a backlash and youth employment rates remained stubbornly low.
Jang directed Moon’s income-led growth policies with measures to boost household income and to narrow the income gap. But a grim jobs market linked to the sharp rise of minimum wages made the move unpopular among voters, weighing on Moon’s other campaign pledges such as chaebol reform.
--With assistance from Youkyung Lee.
To contact the reporters on this story: Jungah Lee in Seoul at email@example.com;Hooyeon Kim in Seoul at firstname.lastname@example.org
To contact the editors responsible for this story: Tan Hwee Ann at email@example.com, Paul Jackson, Brett Miller
©2018 Bloomberg L.P.