ID :
44773
Sun, 02/08/2009 - 20:34
Auther :
Shortlink :
https://www.oananews.org//node/44773
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Manufacturing slowdown worse than a decade ago: think tank
SEOUL, Feb. 8 (Yonhap) -- South Korea's manufacturing industry is losing steam
faster than during a financial crisis more than a decade ago, a private think
tank said Sunday, raising the possibility of negative growth for the economy.
"The manufacturing sector is slowing at a much faster pace than that during the
1997-98 financial crisis," the LG Economic Research Institute said in a report.
"Given that, the economy could contract this year."
According to the think tank, output for the manufacturing industry fell a record
18.6 percent in December from a year earlier, compared with a 13.6 percent drop
during the financial crisis a decade ago.
Factories operated at an average 62.5 percent of their capacity in December,
lower than the lowest capacity utilization rate of 63.8 percent during the
economic crisis.
Exports, which had shown double-digit growth rates in the first half, swung to
negative growth in November and tumbled 32.8 percent on-year due to the current
global economic slowdown, the institute said.
"South Korean exports were not much affected by the 1997-98 financial crisis,
which was limited to some Asian countries," it said. "However, the current
situation is different."
In light of plunging exports, the think tank predicted that it is difficult to
rule out the possibility of the Korean economy contracting this year.
The South Korean economy shrank 5.6 percent last quarter from three months
earlier, the first quarterly decline since the first quarter of 1998. Hit by
sinking exports, the economy is feared to post negative growth this year.
Early last week, the International Monetary Fund predicted the South Korean
economy will shrink 4 percent this year due to weak domestic demand and tumbling
exports amid the global economic slump.
Switzerland-based UBS has predicted the economy will shrink 3 percent this year.
Moody's Investors Service lowered its outlook to minus growth of 2 percent, while
Fitch Ratings expects a 2.4 percent contraction.
(END)
faster than during a financial crisis more than a decade ago, a private think
tank said Sunday, raising the possibility of negative growth for the economy.
"The manufacturing sector is slowing at a much faster pace than that during the
1997-98 financial crisis," the LG Economic Research Institute said in a report.
"Given that, the economy could contract this year."
According to the think tank, output for the manufacturing industry fell a record
18.6 percent in December from a year earlier, compared with a 13.6 percent drop
during the financial crisis a decade ago.
Factories operated at an average 62.5 percent of their capacity in December,
lower than the lowest capacity utilization rate of 63.8 percent during the
economic crisis.
Exports, which had shown double-digit growth rates in the first half, swung to
negative growth in November and tumbled 32.8 percent on-year due to the current
global economic slowdown, the institute said.
"South Korean exports were not much affected by the 1997-98 financial crisis,
which was limited to some Asian countries," it said. "However, the current
situation is different."
In light of plunging exports, the think tank predicted that it is difficult to
rule out the possibility of the Korean economy contracting this year.
The South Korean economy shrank 5.6 percent last quarter from three months
earlier, the first quarterly decline since the first quarter of 1998. Hit by
sinking exports, the economy is feared to post negative growth this year.
Early last week, the International Monetary Fund predicted the South Korean
economy will shrink 4 percent this year due to weak domestic demand and tumbling
exports amid the global economic slump.
Switzerland-based UBS has predicted the economy will shrink 3 percent this year.
Moody's Investors Service lowered its outlook to minus growth of 2 percent, while
Fitch Ratings expects a 2.4 percent contraction.
(END)
