ID :
48611
Tue, 03/03/2009 - 08:21
Auther :
Shortlink :
https://www.oananews.org//node/48611
The shortlink copeid
Investment banks see steeper slide in Korean economy
SEOUL, March 3 (Yonhap) -- Major global investment banks forecast South Korea's economy will likely shrink around 3 percent this year due to slumping exports amid a worldwide recession, data showed Tuesday.
According to the data compiled by the Korea Center for International Finance, 10
major investment banks predicted Asia's fourth-largest economy would contract by
an average of 2.9 percent for this year, down from a 2.3 percent decline
predicted at the end of January.
Switzerland-based UBS offered the most downbeat view, expecting a 5 percent
contraction compared with its earlier minus 3 percent growth forecast. Citibank
also sharply downgraded its growth outlook from minus 1.8 percent to minus 4.8
percent.
Standard Chartered also took a pessimistic view, forecasting the economy will
shrink 2.5 percent this year. It earlier expected a 1.2 percent decline. All the
other seven banks stood pat on their earlier predictions, the data showed.
The downgrade was attributed mostly to spreading concerns that the South Korean
economy might be more vulnerable than others to a deepening global economic
recession as it depends heavily on exports for its growth.
The global economy is facing a second round of financial turmoil with rising
default risks for Eastern European countries and lingering anxiety over how the
United States will handle its embattled major banks.
South Korea's economy is also showing marked signs of slipping deeper into a
recession with exports falling sharply, hit by recessions in the U.S., Japan and
Europe. In February, overseas shipments fell 17 percent to US$25.8 billion from a
year earlier.
Companies here have scaled back production due to dwindling demand. Industrial
output fell at the sharpest pace on record in January from a year earlier as
manufacturers trimmed production of semiconductors and automobiles, the nation's
key export items, according to government data.
South Korea expects the economy will contract 2 percent for this year, compared
with a 2.5 percent expansion for 2008. That figure is still relatively
optimistic. The International Monetary Fund is predicting a 4 percent
contraction.
In an effort to turn the sagging economy around, the government has unveiled a
raft of stimulus measures including tax cuts and increased fiscal spending.
Finance Minster Yoon Jeung-hyun said earlier that the government will submit an
extra budget plan to the National Assembly this month for approval.
The Bank of Korea, the nation's central bank, joined the turnaround efforts by
slashing its key interest rate in February by half a percentage point to a record
low of 2 percent, the sixth cut in four months.
kokobj@yna.co.kr
(END)
According to the data compiled by the Korea Center for International Finance, 10
major investment banks predicted Asia's fourth-largest economy would contract by
an average of 2.9 percent for this year, down from a 2.3 percent decline
predicted at the end of January.
Switzerland-based UBS offered the most downbeat view, expecting a 5 percent
contraction compared with its earlier minus 3 percent growth forecast. Citibank
also sharply downgraded its growth outlook from minus 1.8 percent to minus 4.8
percent.
Standard Chartered also took a pessimistic view, forecasting the economy will
shrink 2.5 percent this year. It earlier expected a 1.2 percent decline. All the
other seven banks stood pat on their earlier predictions, the data showed.
The downgrade was attributed mostly to spreading concerns that the South Korean
economy might be more vulnerable than others to a deepening global economic
recession as it depends heavily on exports for its growth.
The global economy is facing a second round of financial turmoil with rising
default risks for Eastern European countries and lingering anxiety over how the
United States will handle its embattled major banks.
South Korea's economy is also showing marked signs of slipping deeper into a
recession with exports falling sharply, hit by recessions in the U.S., Japan and
Europe. In February, overseas shipments fell 17 percent to US$25.8 billion from a
year earlier.
Companies here have scaled back production due to dwindling demand. Industrial
output fell at the sharpest pace on record in January from a year earlier as
manufacturers trimmed production of semiconductors and automobiles, the nation's
key export items, according to government data.
South Korea expects the economy will contract 2 percent for this year, compared
with a 2.5 percent expansion for 2008. That figure is still relatively
optimistic. The International Monetary Fund is predicting a 4 percent
contraction.
In an effort to turn the sagging economy around, the government has unveiled a
raft of stimulus measures including tax cuts and increased fiscal spending.
Finance Minster Yoon Jeung-hyun said earlier that the government will submit an
extra budget plan to the National Assembly this month for approval.
The Bank of Korea, the nation's central bank, joined the turnaround efforts by
slashing its key interest rate in February by half a percentage point to a record
low of 2 percent, the sixth cut in four months.
kokobj@yna.co.kr
(END)
