S. Korea's growth to slump more than forecast: top official

(ATTN: CORRECTS BOK's growth projection in paras 1, 2)
SEOUL, Jan. 15 (Yonhap) -- South Korea might be unable to meet its central bank's
prediction of 2 percent economic growth for this year as the economy is fast
slipping into a recession, a top policymaker said Thursday.
"This year, we will likely see an accelerating economic recession," Vice Finance
Minister Bae Kook-hwan told a meeting of business leaders. "Growth could fall
short of predictions made by the central bank and other research institutions
including the International Monetary Fund."
The Bank of Korea has predicted a 2-percent economic growth for this year,
compared with the previous year's 3.6 percent. The IMF predicted a 2-percent
expansion.
Major think tanks at home and abroad are rushing to cut their 2009 growth
projections for South Korea with some forecasting the first recession in more
than a decade for Asia's fourth-largest economy.
To cushion the impact of a looming global recession, the government has unveiled
diverse economy-stimulus measures, including tax cuts, eased regulations and
expanded spending.
Earlier in the day, the finance ministry said it has assigned a total of around
44 percent or 108.8 trillion won (US$80.87 billion) out of its annual budget for
the first quarter. It is higher than the previous year's 38 percent. The
government forecast the economy could grow around 3 percent if such policy
efforts succeed.
Still, the real economy remains under heavy strain from the global economic
crisis, hit by weakening demand both at home and abroad.
On Friday, Ssangyong Motor, the local unit of China's largest automaker, filed
for bankruptcy protection, becoming the first high-profile casualty here from the
ongoing crisis that started in mid-September with the collapse of investment
banking giant Lehman Brothers.
Corporate failures are feared to hit the already-sluggish job market. According
to government data on Wednesday, 12,000 jobs were lost in December, compared with
a year earlier, marking the first contraction since October 2003.
President Lee Myung-bak on Thursday suggested "job sharing" among workers as a
possible way to create more jobs.
kokobj@yna.co.kr
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