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Looking ahead 2018

Moon's tax hikes too big for South Korea's economy

Companies likely to step up drive to expand overseas production

| South Korea
President Moon Jae-in's notable shift to fiscal stimulus and plans to raise taxes on large companies to prop up smaller ones could temper investment.   © Reuters

The South Korean stock market has greeted President Moon Jae-in's first seven months in office with record highs, on the back of a surge of buying by foreign investors.

In recent weeks, however, the costs associated with a left-wing government have become visible as the administration looks to raise the minimum wage, increase income taxes and clamp down on the booming domestic property market through higher taxes on capital gains.

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