South Korea needs to prepare for prolonged US fiscal crisis in a bid to minimize negative impact from the ongoing shutdown of the US government, the country's main opposition party said Tuesday.
"Fiscal cliff crisis in the United States, which has covered fiscal deficit through government bond sales, may last," Democratic Party spokeswoman Lee Eon-joo told reporters at the National Assembly headquarters.
The world's largest economy would not face its first-ever default for the time being, but problems would not be resolved completely even after agreements on the budget plan and debt ceiling are reached, Lee said, urging the South Korean government to draw up countermeasures against the possible prolongation of the US fiscal crisis.
U.S. stocks took a hit overnight amid growing concerns about the possible debt default. The fiscal deadlock dragged on into the second week, with little signs of progress in budget negotiations in Congress.
If the Congress fails to raise the current debt ceiling of 16.7 trillion US dollars by the deadline of Oct. 17, the US administration will fall into default on debt for the first time in the country's history.
The spokeswoman said that the ongoing US government shutdown would have a negative impact on the South Korean economy as well as its own economy, noting that higher interest rates in the US and weak dollar trend would strike South Korea's exports and financial markets.