S. Korean economy to slow down in H2: survey

SEOUL, July 12 (Yonhap) -- South Korea is likely to face an economic slowdown or
slip into a slump in the second half of the year as Europe's debt woes linger and
the world economy loses steam, a poll showed Monday.
According to a survey of 22 professors, researchers and other economic experts,
77.3 percent of the respondents said the economy's growth will slacken in the
July-December period compared with the first half.
Nearly 9 percent predicted the country's economic conditions to take a turn for
the worse in the second half, according to the survey conducted by the Federation
of Korean Industries (FKI), the largest industry lobby in South Korea.
Half of those surveyed cited Europe's debt crisis as the biggest threat for the
South Korean economy, while the other half viewed the biggest threat as a slow
recovery in major economies, it said.
The FKI warned that the slowdown of an economic recovery may further be
aggravated by any rash exit strategy, such as a steep rise in key interest rates.
"If the central bank suddenly raises key rates as part of an exit strategy, it
will lead to an increase of financial burdens on companies, and thus causing a
drop in demand and slowdown in economic recovery," the FKI said.
The Bank of Korea (BOK) on Friday raised the benchmark seven-day repo rate to
2.25 percent from a record low of 2 percent, ending a 16-month stand-pat run.
The central bank predicted earlier Monday that the Korean economy will likely
expand 4.5 percent from a year earlier in the second half after growing 7.4
percent on-year in the first six months of the year.
bdk@yna.co.kr
(END)

Delete & Prev | Delete & Next