Strong Mandate For Reform

BMI View: The landslide victory of Lee Myung-bak in the presidential elections on December 19 2007 heralds tax cuts, labour market reform and the dismantlement of regulations in the housing market and financial sector over the next five years. Internal opposition and adverse conditions should, however, serve to dilute the more ambitious points in his election platform, such as the Great Korea Canal project. We still see a risk for a policy-induced overheating of the Korean economy over the coming two-year period.

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