S. Korea able to achieve growth outlook for 2009: finance minister

SEOUL, July 29 (Yonhap) -- South Korea will likely achieve its growth prediction
for this year as economic conditions are improving from the turmoil sparked by
the global financial crisis last year, the nation's top economic policymaker said
Wednesday.

Last month, the government predicted that the nation's gross domestic product
will shrink 1.5 percent this year, revising its earlier prediction of minus 2
percent, citing expanded fiscal spending and other stimulus measures.
The economy has recently begun to show signs of rebounding with the GDP expanding
2.3 percent in the second quarter from three months earlier, higher than a
government forecast of 1.7 percent growth, according to a report by the Bank of
Korea (BOK). The figure is also much higher than a 0.1 percent advance in the
first quarter.
"We had better-than-expected growth for the second quarter, along with
fast-improving consumer and business sentiment, all of which are raising optimism
for an economic recovery," Finance Minister Yoon Jeung-hyun told a weekly
policymaking meeting.
"All in all, our economic conditions are in better shape than other countries ...
It would not be tough to beat this year's growth outlook though uncertainties
still remain within the economy," he added.
Hit hard by the global financial turbulence last summer, South Korea's economy
went into free fall with its stock and currency markets losing substantial
ground.
The crisis prompted the government and the central bank to implement large-scale
fiscal spending and aggressive cuts to the key interest rate. In April, the
parliament approved a 28.4 trillion won (US$22.7 billion) extra budget aimed at
generating jobs and boosting domestic demand.
The government promised to keep its "expansionary" macroeconomic policy stance
until the private sector is capable of growing on its own.
Yoon noted that the brisker growth in the second quarter is attributed mainly to
"one-off" factors such as budget frontloading, tax benefits and other measures
aimed at bolstering domestic demand.
The minister cautioned that the main task for the rest of this year is to "keep
the momentum" through aggressive execution of the additional budget and measures
intended to bolster corporate spending so as to allow investment and
private-sector consumption to take over as the main force behind an economic
rebound.
For the second half, he predicted that the nation's economic growth will turn
positive compared with the same period a year earlier, though the on-quarter
growth rate will slow in the period from July to September due to the
sharper-than-expected expansion over the previous three months.
kokobj@yna.co.kr
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