The paper, The Australian, quoted Kim in an interview published on Saturday as saying the IMF had provided South Korea with great help, but he also described some of its policies as being inadequate.

``Especially they wanted too much austerity and too high interest rates,'' he told the paper.

``We have recognised this, so we are now making adjustments to policy,'' he added.

South Korea was forced to turn to the IMF last year for a record $58.35 billion bail-out package at the height of a financial crisis which brought it to the brink of national default.

But financial analysts said the forced belt-tightening was doing more harm than good in a country where domestic consumption takes up more than half the gross domestic product.

The South Korean media reported earlier thismonth that inflation-adjusted consumption by urban workers dropped 19.7 per cent in the second quarter of this year from 1997, the biggest quarterly fall in 35 years.

Last week, Daewoo Research Institute, a think-tank, said domestic consumption during the first half of this year plunged 28 per cent from a year ago, the steepest drop among Asian countries hit by a foreign exchange crisis.

Wholesale and retail sales, a private consumption indicator, dropped 8.5 per cent.