Bank of Korea torn between debt and demand

Bank of Korea, Seoul

The Bank of Korea faces a trade-off between stimulating demand and exacerbating the debt overhang in the country, with governor Juyeol Lee today warning there is no quick fix for the "difficulties" in the economy.

One group in a bind is the small and mid-sized Korean firms that employ nine out of 10 of the country's workers. Falling inflation, dragged down by lower oil prices, is compounding sluggish demand and squeezing profit margins. Investment is lacklustre.

The won, while cheaper in US doll

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