Finance minister says economy to pick up from H2

SEOUL, Jan. 4 (Yonhap) -- The South Korean economy is likely to recover gradually
from a slump sparked by the global business downturn starting in the second half
of this year, the nation's top economic policymaker said Sunday.

The government expects the economy, Asia's fourth-largest, to grow 3 percent for
all of 2009 after suffering hardships through the first half. The Bank of Korea,
the central bank, has projected the economy to grow 2 percent this year.
"The economy will likely begin to pick up from as early as the second half,"
Finance Minister Kang Man-soo said on a local radio program. "The economy
switched to negative growth in the fourth quarter of last year."
Most experts predict the economy will suffer the most in the first half, so the
government will make all-out efforts to mitigate the anticipated hardships, he
said.
Kang said the government can expand its fiscal spending if it is deemed necessary
to help spur the slumping economy.
"The world is undergoing an unprecedented economic crisis and there is a global
consensus for fiscal expansion," he said. "If necessary, the government can spend
more because its fiscal conditions are strong."
In a desperate bid to keep the economy from slipping into a deeper downturn, the
government plans to expand its fiscal spending by as much as 51 trillion won
(US$38.4 billion) this year.
The minister also said two state-run banks -- the Korea Development Bank and the
Export-Import Bank of Korea -- will bring in $2 billion in January to help
dollar-strapped companies.
In the wake of the U.S.-sparked global financial crisis, local companies have
been suffering from a shortage of dollar liquidity.
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