ID :
72353
Mon, 07/27/2009 - 15:47
Auther :
Shortlink :
https://www.oananews.org//node/72353
The shortlink copeid
S. Korean economy to shrink 1.8 pct in 2009: think tank
SEOUL, July 27 (Yonhap) -- The Korea Institute of Finance (KIF) on Monday revised
up its growth forecast of the South Korean economy this year on fiscal spending
and rate cuts, but estimated that a full-blown recovery would be possible only
after next year.
Asia's fourth-largest economy is expected to shrink 1.8 percent in 2009, sharply
up from its previous estimate of a 2.8 percent contraction, the local think tank
said in a recent revised outlook.
"The Korean economy has emerged from a sharp downturn and entered the recovery
phase, but the growth path will heavily depend on the global economy," the KIF
said in a statement. "A full-blown recovery would be possible only after next
year when the recovery of the global economy may be in sight."
The revised figure compared with a 1.6 percent fall forecast by the Bank of Korea
(BOK), the country's central bank. The government upgraded its outlook for the
Korean economy to a 1.5 percent contraction.
The government and the BOK have been scrambling to bolster the sagging economy by
large scale fiscal spending and aggressively cutting the key interest rates.
But the think tank said the growth of the local economy will likely remain almost
flat in the second half, indicating that it is too early to say that the economy
has entered a full-fledged recovery phase.
"If export growth continues to stagnate, full-blown recovery is unlikely only
with improving domestic demand...The Korean economy is likely to recover very
slowly, showing a U-shaped recovery."
The KIF said the Korean economy is forecast to fall 0.2 percent in the
July-December period from a year earlier after declining 3.4 percent on-year in
the first half.
The think tank said the government and the central bank should carefully review
the timing of ending their softer fiscal and monetary policies and called on them
to keep the current accommodative policy stance for the time being.
"A hasty shift to a tightening stance would throw cold water on a mild economic
recovery. It is premature to implement an exit strategy, which should be carried
out only when the recovery is full-blown."
The BOK cut the key rate by a total of 3.25 percentage points to a record low of
2 percent between October and February in a bid to bolster the slowing economy.
sooyeon@yna.co.kr
(END)
up its growth forecast of the South Korean economy this year on fiscal spending
and rate cuts, but estimated that a full-blown recovery would be possible only
after next year.
Asia's fourth-largest economy is expected to shrink 1.8 percent in 2009, sharply
up from its previous estimate of a 2.8 percent contraction, the local think tank
said in a recent revised outlook.
"The Korean economy has emerged from a sharp downturn and entered the recovery
phase, but the growth path will heavily depend on the global economy," the KIF
said in a statement. "A full-blown recovery would be possible only after next
year when the recovery of the global economy may be in sight."
The revised figure compared with a 1.6 percent fall forecast by the Bank of Korea
(BOK), the country's central bank. The government upgraded its outlook for the
Korean economy to a 1.5 percent contraction.
The government and the BOK have been scrambling to bolster the sagging economy by
large scale fiscal spending and aggressively cutting the key interest rates.
But the think tank said the growth of the local economy will likely remain almost
flat in the second half, indicating that it is too early to say that the economy
has entered a full-fledged recovery phase.
"If export growth continues to stagnate, full-blown recovery is unlikely only
with improving domestic demand...The Korean economy is likely to recover very
slowly, showing a U-shaped recovery."
The KIF said the Korean economy is forecast to fall 0.2 percent in the
July-December period from a year earlier after declining 3.4 percent on-year in
the first half.
The think tank said the government and the central bank should carefully review
the timing of ending their softer fiscal and monetary policies and called on them
to keep the current accommodative policy stance for the time being.
"A hasty shift to a tightening stance would throw cold water on a mild economic
recovery. It is premature to implement an exit strategy, which should be carried
out only when the recovery is full-blown."
The BOK cut the key rate by a total of 3.25 percentage points to a record low of
2 percent between October and February in a bid to bolster the slowing economy.
sooyeon@yna.co.kr
(END)
