UPDATE 1-S.Korea needs to further open financial markets-cenbank chief
NEW YORK Oct 15 (Reuters) - South Korean Central Bank Governor Kim Choong-soo said on Tuesday the country needs to further open up its financial markets in order to boost economic growth and establish a bigger role as a financial center in Asia.
"We have made efforts to conclude FTAs (free trade agreements) with already 45 countries. But usually those FTAs are used to strengthen our business relationships with our partners," Kim told the Economic Club of New York.
"Now what we have to do, I think, is to make further efforts to liberalize our financial markets and also establish better institutional settings," he said.
The central bank forecasts economic growth for 2014 at 3.8 percent, versus a 2013 expectation of 2.8 percent growth. Inflation is projected to rise 1.2 percent this year and grow to 2.5 percent in 2014.
Kim said the current plan is to try to get Korea's economic growth high enough to alleviate some of the upward pressures on rising household debt levels, but it is secondary to the global economy's currently fragile conditions.
"For the moment, the highest priority is placed on overcoming the crisis so we try to contain the growth of household debt to a certain range, so that the household debt cannot evolve as a crisis," Kim said.
"Consumption as all of you know is the broadest component of GDP and with high household debt, our consumption cannot grow. So clearly that is one of the headaches we currently face," he said noting that domestic demand is expected to contribute less than half of GDP next year.
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