S. Korea's economy to recover faster than other major countries: official

SEOUL, April 22 (Yonhap) - South Korea's economy is expected to recover at a
relatively faster pace than advanced countries and other Asian rivals as it is
showing some positive signs of stabilization, a senior economic policymaker said
Wednesday.

"Though we cannot rule out the worsening local labor market which will shed more
jobs down the road, some indicators are showing positive signs including recent
expansion in industrial output," Vice Finance Minister Hur Kyung-wook told a
local radio program. "Overall, we expect our economy to recover at a faster pace
than advanced nations and other Asian rivals."
His views are in line with a recent report by the Organization for Economic
Cooperation and Development which said that the South Korean economy will likely
bounce back faster than its member countries.
Buffeted by a protracted global downturn, the South Korean economy is feared to
contract 2.4 percent this year, the first negative growth in more than a decade,
according to the latest prediction by the central bank.
The government rushes to unveil a series of stimulus measures, including a 28.9
trillion won extra budget, which is subject to parliamentary approval.
Macroeconomic indicators are showing some signs of stabilization, raising hopes
for a faster-than-expected recovery. Industrial output expanded in February from
a month earlier and financial markets are regaining composure.
Opinions, however, are divided over the recovery pace. The International Monetary
Fund is also expected to sharply lower its 2010 growth outlook for South Korea,
signaling that more time will be needed for the economy to fully bounce back.
Hur also cautioned that the economic recovery is not likely be quick and swift
just as seen after the nation was hit by the Asian financial crisis a decade ago.
"It is unlikely to be a V-shaped recovery," Hur said. "A fast recovery will be
achieved if the extra budget gets approved swiftly and job sharing and efforts to
streamline the service sector will go as planned."
Touching on recent debate on whether excessive liquidity has been unleashed in
the market, the vice minister said that now is not the time to worry about
inflation but make more efforts to stimulate market functions to let money flow.
"We will closely monitor the excessive liquidity issue but the more important
thing to do is to unleash enough money in the market and stimulate the market by
lowering interest rates," he added.
South Korea's economy is feared to lapse into the first recession this year in
more than a decade, as the government predicts demand for Korean goods at home
and abroad will decline amid a protracted global downturn.
kokobj@yna.co.kr
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