ID :
54772
Fri, 04/10/2009 - 16:14
Auther :
Shortlink :
https://www.oananews.org//node/54772
The shortlink copeid
S. Korean economy to shrink 2.4 pct this year: BOK
By Kim Soo-yeon
SEOUL, April 10 (Yonhap) -- The South Korean economy is expected to contract 2.4
percent this year as a global recession will likely hurt already-falling exports
amid stubbornly weak domestic demand, the central bank said Friday.
The growth projection by the Bank of Korea (BOK) is a downward revision from a 2
percent expansion estimate made in December. Asia's fourth-largest economy grew
2.2 percent last year.
"As the global financial system is not likely to recover fast, the Korean economy
is not expected to regain growth momentum in the near term," the BOK said in a
statement.
The 2009 growth prediction would mark the lowest level since a 6.9 percent
contraction in 1998 when the country was in the midst of the Asian financial
crisis.
But the BOK said that the local economy is estimated to have grown 0.2 percent
on-quarter in the first quarter and will likely expand 0.5 percent in the current
quarter.
The BOK's growth cut comes as the government said that Asia's fourth-largest
economy is likely to contract 2 percent this year even after taking into account
a record 28.9 trillion won (US$21.9 billion) extra budget, aimed at creating more
jobs and jump-starting the sputtering economy. Of the total, it set aside 17.7
trillion won for fiscal spending.
The government and the central bank are making efforts to cushion the impact of
the global recession and the financial rout on the Korean economy by unveiling
stimulus packages and cutting the rate.
Exports, which account for about 60 percent of GDP, are forecast to tumble 9.9
percent in 2009, a turnaround from a previous prediction of a 1.3 percent
expansion.
Private spending, one of the main growth engines of the South Korean economy,
will likely decline 2.6 percent this year, compared with a 0.8 percent gain
previously estimated.
Construction investment is projected to gain 1.8 percent, compared with an
earlier estimate of a 2.6 percent rise while facility investment is forecast to
plunge 18 percent, more than a previous forecast of a 3.8 percent contraction.
Meanwhile, the BOK expected the country's inflation to slow to 2.7 percent,
compared with 3 percent estimate as falling oil prices and slumping demand would
reduce overall import bills. The BOK aims to keep annual inflation between 2.5
percent and 3.5 percent until 2009.
The outlook downgrade comes a day after the BOK froze its key interest rate at a
record low of 2 percent for the second straight month in April, saying that a
sharp fall in economic activity has moderated. It had made six consecutive rate
cuts totaling 3.25 percentage points since October before taking a pause in
March.
Industrial output gained 6.8 percent on-month in February after posting a 1.6
percent advance in January. South Korea's trade surplus reached a record US$4.6
billion in March.
But despite some signs of improvements, BOK Gov. Lee Seong-tae warned that the
Korean economy may not hit bottom in the first half of this year, saying that
there is room for possible rate cuts.
The bank also said Korea is forecast to post a current account surplus of around
$18 billion this year, down from a previous estimate of $22 billion, it added.
The government predicted that the surplus will likely reach around $16 billion.
sooyeon@yna.co.kr
(END)
SEOUL, April 10 (Yonhap) -- The South Korean economy is expected to contract 2.4
percent this year as a global recession will likely hurt already-falling exports
amid stubbornly weak domestic demand, the central bank said Friday.
The growth projection by the Bank of Korea (BOK) is a downward revision from a 2
percent expansion estimate made in December. Asia's fourth-largest economy grew
2.2 percent last year.
"As the global financial system is not likely to recover fast, the Korean economy
is not expected to regain growth momentum in the near term," the BOK said in a
statement.
The 2009 growth prediction would mark the lowest level since a 6.9 percent
contraction in 1998 when the country was in the midst of the Asian financial
crisis.
But the BOK said that the local economy is estimated to have grown 0.2 percent
on-quarter in the first quarter and will likely expand 0.5 percent in the current
quarter.
The BOK's growth cut comes as the government said that Asia's fourth-largest
economy is likely to contract 2 percent this year even after taking into account
a record 28.9 trillion won (US$21.9 billion) extra budget, aimed at creating more
jobs and jump-starting the sputtering economy. Of the total, it set aside 17.7
trillion won for fiscal spending.
The government and the central bank are making efforts to cushion the impact of
the global recession and the financial rout on the Korean economy by unveiling
stimulus packages and cutting the rate.
Exports, which account for about 60 percent of GDP, are forecast to tumble 9.9
percent in 2009, a turnaround from a previous prediction of a 1.3 percent
expansion.
Private spending, one of the main growth engines of the South Korean economy,
will likely decline 2.6 percent this year, compared with a 0.8 percent gain
previously estimated.
Construction investment is projected to gain 1.8 percent, compared with an
earlier estimate of a 2.6 percent rise while facility investment is forecast to
plunge 18 percent, more than a previous forecast of a 3.8 percent contraction.
Meanwhile, the BOK expected the country's inflation to slow to 2.7 percent,
compared with 3 percent estimate as falling oil prices and slumping demand would
reduce overall import bills. The BOK aims to keep annual inflation between 2.5
percent and 3.5 percent until 2009.
The outlook downgrade comes a day after the BOK froze its key interest rate at a
record low of 2 percent for the second straight month in April, saying that a
sharp fall in economic activity has moderated. It had made six consecutive rate
cuts totaling 3.25 percentage points since October before taking a pause in
March.
Industrial output gained 6.8 percent on-month in February after posting a 1.6
percent advance in January. South Korea's trade surplus reached a record US$4.6
billion in March.
But despite some signs of improvements, BOK Gov. Lee Seong-tae warned that the
Korean economy may not hit bottom in the first half of this year, saying that
there is room for possible rate cuts.
The bank also said Korea is forecast to post a current account surplus of around
$18 billion this year, down from a previous estimate of $22 billion, it added.
The government predicted that the surplus will likely reach around $16 billion.
sooyeon@yna.co.kr
(END)
