OECD forecasts expansion of S. Korean economy by year's end

SEOUL, Sept. 13 (Yonhap) -- South Korea's economy is expected to start expanding
from the end of this year as the country is on a path to recovery from its worst
downturn in a decade, according to the latest data released by the Organization
for Economic Cooperation and Development Sunday.
The OECD's composite leading indicators of economic activity for South Korea rose
to 101.2 in July, compared with 99.9 in June, the Ministry of Finance and Economy
said in a statement citing the Paris-based organization's data.
The reading above 100 means South Korea's economy is likely to reach a phase of
expansion from that of recovery within four to six months.
Among the 29-member OECD economies, only Italy (104.8), France (102.7) and
Finland (102.5) came ahead of South Korea, the ministry statement showed.
The latest OECD data came as the Korean government was considering the timing of
withdrawing expansionary economic policy measures that were put in place late
last year to counter the global economic crisis.
Still, high-ranking government officials, including Finance Minister Yoon
Jeong-hyun, have reiterated that the government will not rush to adopt an exit
strategy, despite a rapid rise in asset prices.
But economists say South Korea, along with several other Asian nations, may be
the first to tighten monetary and fiscal policies after adopting hefty
expansionary steps to ride out the global downturn.
Last week, the Korea Development Institute, a key government think tank, raised
the nation's 2009 growth forecast to a 0.7 percent contraction from an earlier
forecast of a 2.3 percent shrinkage.
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