Global economy unlikely to lapse into 'double-dip': economist

SEOUL, Feb. 10 (Yonhap) -- The global economy is not likely to fall into a
double-dip recession this year as advanced economies are forecast to "cautiously"
gauge the timing of a potential rate hike, an economist said Wednesday.
"Developed countries including the U.S. are likely to refrain from an early
tightening. The possibility that the global economy could lapse into a double-dip
is extremely low," Oh Suk-tae, a senior economist at SC First Bank Ltd., told a
group of reporters.
The global economy is recovering on the back of massive stimulus packages and
aggressive rate cuts, but concerns have mounted that European debt woes and
prospects about potential early rate hikes could dent budding signs of an
economic recovery or send the global economy into a double-dip recession, defined
as a second economic downturn followed by a brief recovery.
The economist said as the pace of the U.S. recovery has yet to be sustainable,
the Federal Reserve may not be able to start raising borrowing costs until the
second half of next year.
"A full-fledged recovery of the U.S. economy hinges on how quickly private
consumption there picks up," he said.
Oh noted that South Korea's economy is forecast to grow 4.8 percent this year on
the back of robust exports and domestic demand although export growth may slow
down over the mid-and long term.
Oh said the Bank of Korea (BOK) is likely to raise its key interest rate
back-to-back in February and March, given the strength of the economic recovery.
His view is not in line with market consensus that predicts the BOK will freeze
the rate at a record low of 2 percent for the 12th straight month on Thursday.
sooyeon@yna.co.kr
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