S. Korean economy likely to rebound from H2: KDI head

SEOUL, March 25 (Yonhap) -- South Korea's economy may begin to make a rebound in the second half of this year, the head of a state-run think tank said Wednesday, adding it is currently "accumulating energy" before staging a turnaround.

"Our economy will attempt to make a rebound starting in the second half, at least
in terms of indicators," Hyun Oh-seok, the head of the Korea Development
Institute (KDI) said in an interview. "A full-swing recovery may start sometime
in the first half of next year."
Hyun, appointed to lead the think tank on Monday, said that the economy is now
consolidating its bottom to "accumulate energy" for a rebound.
His comments come as South Korea's economy is feared to fall into the first
recession in more than a decade. The government earlier predicted that the
economy, Asia's fourth-largest, will contract 2 percent with around 200,000 jobs
to be lost this year.
On Tuesday, the government proposed a 28.9-trillion won (US$20.7 billion) extra
budget aimed at creating jobs and reviving the economy. It predicts the
additional spending alone could lead to a 1.5-percentage point hike in gross
domestic product and 550,000 new jobs.
"Fiscal spending will result in creating jobs, which will in turn increase
purchasing power and stimulate overall domestic demand," Hyun said. "Massive
fiscal spending measures, including the latest extra budget, could reverse the
downturn and send the growth rate into positive terrain this year."
Brushing off concerns over worsening fiscal soundness, Hyun called for more
fiscal spending measures. He stressed that timing and careful coordination in
implementing such measures will be crucial to achieving earlier-than-expected
plus economic growth.