S. Korea`s economy to grow around 5 pct in 2010: think tank

SEOUL, Dec. 3 (Yonhap) -- South Korea's economy is expected to grow around 5
percent in 2010 as the global economy is on a path to recovery from the recent
financial crisis, the heads of local think tank said Thursday.
Heads of five local think tanks -- Samsung Economic Research Institute, LG
Economic Research Institute, Korea Development Institute, and Korea Institute for
Industrial Economics and Trade (KIET) -- agreed at a meeting with government
officials in Seoul that the national economy should improve steadily in the new
year.
They said that despite gains there would be little risk of the economy
"overheating" or of inflationary pressure in the near future, and called on the
government to maintain its stimulus policies.
Seoul approved a 28.4 trillion won (US$24.5 billion) extra budget in late April
to help stabilize the economy that may pull off a 0.1 percent on-year growth this
year.
"South Korea's economy has made impressive gains from the second quarter onwards,
but this may be due to global efforts to stimulate countries' respective
economies that fueled consumption, favorable exchange rates and low raw materials
prices," said KIET president Oh Sang-bong.
He said that since such developments may not continue into the new year, Seoul
must be careful about implementing a so-called exit strategy aimed at preventing
overheating.
Others said that if the government opts to take measures to "cool down" the
economy and preempt any fallout, it must make certain that small-sized businesses
are not hurt.
Think tanks added that policymakers should keep close tabs on exchange rates that
could affect the price competitiveness of local products abroad. Experts
speculated that international crude oil prices could reach an average of $74.5
next year.
Knowledge Economy Minister Choi Kyung-hwan, meanwhile, concurred that the economy
is making a comeback and stressed that Seoul is taking steps to deal with sudden
fluctuations in exchange rates, crude oil and raw materials prices.
He said, however, that the government and the businesses community should guard
against "over confidence" since there are many hurdles to overcome before the
economy has fully recovered.
yonngong@yna.co.kr
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