Economy may contract less than 1 pct: official

SEOUL, Sept. 14 (Yonhap) -- The South Korean economy may contract by less than 1
percent this year, a government official said Monday, citing noticeable signs of
a rebound.

The assessment is much more optimistic than negative growth of 1.5 percent,
forecast by the finance ministry for 2009 in late June.
"Officially, Seoul will adhere to its minus 1.5 percent growth estimate," said
the ministry official, who declined to be identified, "but there is growing
confidence among policymakers that the level of contraction will hover around
minus 0.6-0.9 percent levels."
The government is currently implementing economic policies that reflect improved
domestic and external conditions, he said.
The South Korean economy grew 2.6 percent in the second quarter from the three
months prior, a big jump from 0.1 percent on-quarter growth between January and
March.
Unless there are unforeseen developments, per capita income may stabilize at
US$18,000 for this year, the official said. There may also be fewer annual job
losses than earlier predicted, he added, suggesting a figure of around 100,000
instead of 150,000.
Per capita income stood at $19,500 last year. As the Korean currency tumbled at
the height of the economic turmoil last winter, some expected that figure could
fall to the $15,000-level for 2009.
Still, the government is continuing to carefully monitor foreign exchange rates
and crude oil prices, other sources here said. If either of those figures were to
turn volatile it could seriously hamper growth efforts as South Korea relies on
heavily imports for its energy needs.
Business investment will be another crucial element in determining growth, as it
is vital to job creation and spurring consumption, the government has said.
Instability in international financial markets and uncertainties surrounding
North Korea's nuclear program also serve as downside risks to the South Korean
economy.
yonngong@yna.co.kr
(END)