ID :
42110
Thu, 01/22/2009 - 12:27
Auther :
Shortlink :
https://www.oananews.org//node/42110
The shortlink copeid
Economy slumping at faster-than-expected pace: official
SEOUL, Jan. 22 (Yonhap) -- The South Korean economy is shrinking at a faster-than-expected pace and the government will speed up its fiscal spending to kick-start the slumping economy, a top policymaker said Thursday.
"We have forecast bleak economic outlooks but things are getting worse faster
than has been expected given recent indicators including the central bank's
data," Vice Finance Minister Hur Kyung-wook told reporters before a meeting.
He cited as the worsening labor market condition as a reason for his gloomy
assessment and noted that the government will do its best to kick-start the
economy by frontloading its planned spending this year.
Last month, the economy lost 12,000 jobs compared with a year earlier, the first
such contraction in more than five years.
Earlier in the day, the Bank of Korea said that the country's real gross domestic
product shrank 5.6 percent on-quarter in the October-December period. This is the
worst performance since the first quarter of 1998 when it fell 7.8 percent in the
aftermath of the Asian financial crisis.
The central bank also said that growth in 2008 slumped to 2.5 percent compared
with the previous year's 5 percent expansion. It predicted growth of 2-percent
for this year.
With slumping exports and domestic demand, many investment banks and research
institutes recently lowered their 2009 growth projections for Asia's
fourth-largest economy to the 1-percent range. Some expect the first recession in
more than a decade.
In an apparent bid to shore up market trust in government economic polices and
jump-start the economy, President Lee Myung-bak recently announced a cabinet
reshuffle in which he named Yoon Jeung-hyun, former head of the nation's
financial watchdog as the nation's new finance minster.
He will replace Kang Man-soo, who had been under pressure to resign for what
critics have called his "misguided" economic and financial measures. The
replacement comes less than a year. Hur was also chosen to the vice finance
minster post in the reshuffle.
Market watchers expect the new economic team will bring back market trust and
keep pushing for the government's economy-stimulus measures including tax cuts,
eased regulations and expanded fiscal spending.
"We have forecast bleak economic outlooks but things are getting worse faster
than has been expected given recent indicators including the central bank's
data," Vice Finance Minister Hur Kyung-wook told reporters before a meeting.
He cited as the worsening labor market condition as a reason for his gloomy
assessment and noted that the government will do its best to kick-start the
economy by frontloading its planned spending this year.
Last month, the economy lost 12,000 jobs compared with a year earlier, the first
such contraction in more than five years.
Earlier in the day, the Bank of Korea said that the country's real gross domestic
product shrank 5.6 percent on-quarter in the October-December period. This is the
worst performance since the first quarter of 1998 when it fell 7.8 percent in the
aftermath of the Asian financial crisis.
The central bank also said that growth in 2008 slumped to 2.5 percent compared
with the previous year's 5 percent expansion. It predicted growth of 2-percent
for this year.
With slumping exports and domestic demand, many investment banks and research
institutes recently lowered their 2009 growth projections for Asia's
fourth-largest economy to the 1-percent range. Some expect the first recession in
more than a decade.
In an apparent bid to shore up market trust in government economic polices and
jump-start the economy, President Lee Myung-bak recently announced a cabinet
reshuffle in which he named Yoon Jeung-hyun, former head of the nation's
financial watchdog as the nation's new finance minster.
He will replace Kang Man-soo, who had been under pressure to resign for what
critics have called his "misguided" economic and financial measures. The
replacement comes less than a year. Hur was also chosen to the vice finance
minster post in the reshuffle.
Market watchers expect the new economic team will bring back market trust and
keep pushing for the government's economy-stimulus measures including tax cuts,
eased regulations and expanded fiscal spending.
