ID :
48863
Wed, 03/04/2009 - 08:32
Auther :
Shortlink :
https://www.oananews.org//node/48863
The shortlink copeid
Korean economy to shrink sharply in Q1: think tanks
SEOUL, March 4 (Yonhap) -- The South Korean economy will likely contract severely
in the first quarter on tumbling exports and weak domestic demand, and may
recover only after next year, local think tanks predicted Wednesday.
Asia's fourth-largest economy is projected to shrink between 5 and 8 percent in
the current quarter from a year earlier, according to estimates by seven local
economic institutions, including the state-run Korea Development Institute (KDI).
"The economy in the first quarter may fall 4 or 5 percent and it could further
deteriorate depending on economic conditions," said Lee Jae-joon, an economist
with KDI.
The Korean economy is rapidly heading into a recession, or two straight quarters
of quarterly decline, as both exports and domestic demand are tumbling amid the
global economic slump. The local economy contracted 3.4 percent on-year last
quarter, the worst performance since the fourth quarter of 1998 when it tumbled 6
percent.
Exports, the mainstay of the Korean economy, have already been dented as the
global recession has eroded demand for Korean products. The country's overseas
shipments plunged a record 33.8 percent in January before falling 17.1 percent
last month.
The prolonged economic downturn is feared to prompt more companies to cut back on
investments and their workforce, forcing households to tighten their purse
strings and dealing a blow to already-weak domestic demand, experts say.
Finance Minister Yoon Jeung-hyun said that the Korean economy is expected to
contract 2 percent this year, which would mark the first annual contraction since
the 1997-98 Asian financial crisis. Bank of Korea Gov. Lee Seong-tae said earlier
it is very likely that the local economy will post negative growth in 2009.
Amid the bleak outlook, many economists say that a recovery can be expected only
after next year and not in the second half of this year.
"As the depth of the global recession is more severe than expected, Korea's
exports have been heavily dented. The local economy will likely recover starting
next year after hitting bottom in the fourth quarter," said Huh Chan-guk,
director of the economic research division at the Korea Economic Research
Institute.
sooyeon@yna.co.kr
(END)
in the first quarter on tumbling exports and weak domestic demand, and may
recover only after next year, local think tanks predicted Wednesday.
Asia's fourth-largest economy is projected to shrink between 5 and 8 percent in
the current quarter from a year earlier, according to estimates by seven local
economic institutions, including the state-run Korea Development Institute (KDI).
"The economy in the first quarter may fall 4 or 5 percent and it could further
deteriorate depending on economic conditions," said Lee Jae-joon, an economist
with KDI.
The Korean economy is rapidly heading into a recession, or two straight quarters
of quarterly decline, as both exports and domestic demand are tumbling amid the
global economic slump. The local economy contracted 3.4 percent on-year last
quarter, the worst performance since the fourth quarter of 1998 when it tumbled 6
percent.
Exports, the mainstay of the Korean economy, have already been dented as the
global recession has eroded demand for Korean products. The country's overseas
shipments plunged a record 33.8 percent in January before falling 17.1 percent
last month.
The prolonged economic downturn is feared to prompt more companies to cut back on
investments and their workforce, forcing households to tighten their purse
strings and dealing a blow to already-weak domestic demand, experts say.
Finance Minister Yoon Jeung-hyun said that the Korean economy is expected to
contract 2 percent this year, which would mark the first annual contraction since
the 1997-98 Asian financial crisis. Bank of Korea Gov. Lee Seong-tae said earlier
it is very likely that the local economy will post negative growth in 2009.
Amid the bleak outlook, many economists say that a recovery can be expected only
after next year and not in the second half of this year.
"As the depth of the global recession is more severe than expected, Korea's
exports have been heavily dented. The local economy will likely recover starting
next year after hitting bottom in the fourth quarter," said Huh Chan-guk,
director of the economic research division at the Korea Economic Research
Institute.
sooyeon@yna.co.kr
(END)
