S. Korea to keep stimulus policy amid lingering uncertainties

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SEOUL, Nov. 5 (Yonhap) -- South Korea's economy is making a
"better-than-expected" recovery but uncertainties remain, a government report
showed Thursday, reaffirming that the nation will keep its expansionary
macroeconomic policy down the road.

"Indicators are showing that production, private consumption, investment and
exports are all rebounding faster. And the nation posted better-than-expected
growth in the third quarter," the Ministry of Strategy and Finance said in a
report.
"However, uncertainties remain in relation to overseas economic conditions, so
South Korea will maintain the macroeconomic policy stance it has taken so far,"
it noted, adding that the government will try to use most of the state budget
assigned for this year in a way that stimulates the economy.
The latest assessment comes amid growing optimism that the economy might be
bottoming out and indeed may have already hit its lowest point amid improving
indicators.
South Korea has unveiled diverse economic stimulus measures including expanded
fiscal spending, tax cuts and sharp interest rate cuts aimed at bolstering
domestic demand and kick-starting the sluggish economy.
According to the nation's central bank, gross domestic product grew 2.9 percent
in the third quarter from three months earlier, a marked turnaround from a 5.1
percent plunge in the final quarter of last year, just after the nation's economy
was hurled into chaos amid the global financial turmoil.
Industrial output expanded 11 percent in September from a year ago, marking the
third straight month of growth. Service-sector production also grew 4.2 percent.
Corporate investment and consumption showed signs of a pickup.
Companies expanded investments with spending on facilities jumping 5.8 percent in
September from a year earlier, a sharp turnaround from the previous month's 15.5
percent on-year contraction. The growth is expected to continue in October,
according to the report.
Consumer goods sales grew 6.7 percent on brisk demand for cars, clothes and
durable goods. The figure marked the fifth straight month of on-year expansion,
according to the report.
The jobless rate also fell to 3.4 percent in September, the lowest level in nine
months. The number of employed people surged to 23.8 million last month, up
71,000 from a year earlier, after the economy added a mere 3,000 new jobs on-year
in August.
But exports remained in a slump, contracting 8.3 percent in October from a year
earlier compared with a 7.8 percent fall the previous month.
The report said that overseas economic conditions are steadily rebounding and
indicators for the domestic economy are also fast recovering but it remains
unclear whether the upturn will continue amid lingering uncertainties.
"We will continue measures aimed at creating jobs, stabilizing the livelihood of
ordinary people and bolstering consumption and investment, while attempting to
enhance the nation's overall economic structure," the report noted.
kokobj@yna.co.kr
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