Korea’s strong recovery from the global financial crisis stems in part from an effective macroeconomic policy response. The prompt withdrawal of fiscal stimulus in 2010 will help meet the medium-term fiscal plan for reducing budget deficits. Given the increase in government spending in the past, making the targets in the plan more binding is important to help achieve the fiscal target. In addition, the broadening of tax bases would be beneficial in this regard. While such policies would help limit government debt, it is also necessary to contain the rapidly rising debt of public corporations, in part by further progress in the 2008 privatisation programme. Monetary stimulus has also supported the recovery. Given the expected strength of output growth in 2010, it is important that the Bank of Korea not fall behind the curve in withdrawing monetary stimulus. Korea should continue its flexible exchange rate policy.