S. Korea's economy faces growing external uncertainties: finance ministry

(ATTN: ADDS KDI's assessment in 5th para)
SEOUL, Feb. 4 (Yonhap) -- South Korea's economy continues to improve but it faces
growing external uncertainties, a government report said Thursday, adding that
stimulus measures will be kept in place for the time being to assure a sustained
recovery.
"The economy keeps improving along with the global economic rebound but it still
faces expanding external risks such as higher oil prices, China's move to adjust
its liquidity and instability in the European market," the finance ministry said
in a monthly report that analyzes the nation's current economic conditions.
"To accelerate the recovery and brace for uncertainties at home and abroad, the
government will stick to its expansionary macroeconomic policy for the time being
and push to frontload its budget spending during the first half without delay,"
it added.
The government assessment comes as the economy is making a faster-than-expected
rebound from what was the worst downturn in more than a decade last year. Private
consumption is picking up and companies are steadily expanding investment.
The Korea Development Institute, a state-run think tank, echoed the finance
ministry's positive assessment, saying in a report released the same day that the
economy appears to be continuing its recovery with "steady" production growth and
improving domestic demand.
South Korea has unveiled a diverse array of economic stimulus measures including
expanded fiscal spending, tax cuts and sharp interest rate cuts aimed at
bolstering domestic demand and kick-starting the sluggish economy.
The ministry earlier forecast that the nation's economy would expand 5 percent
this year after growing a mere 0.2 percent last year.
In the ministry report, meanwhile, the ministry predicted that the nation will
post a trade account surplus this month, a turnaround from a US$470 million
shortfall logged in January.
kokobj@yna.co.kr
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