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Korean economy to avoid negative growth this year
Writer : Sender
Nov 20, 2009
Korea's economy will likely avoid minus growth this year as government-led stimulus measures have boosted domestic demand and exports are making a steady rebound from the global recession, an international economic body said Thursday, according to Yonhap News.
In its latest economic outlook report, the Organization for Economic Cooperation and Development (OECD) expected South Korea's economy to expand 0.1 percent this year before rebounding 4.4 percent next year. The prediction is higher than the negative 2.2 percent and positive 3.5 percent the Paris-based group predicted in June.
"Korea has rebounded strongly after suffering one of the sharpest output declines in the world in the final quarter of 2008 and an unprecedented drop in exports. In contrast, Korean exports expanded at a double-digit rate during the first three quarters of 2009 despite the contraction in world trade," the report said.
"The recovery was bolstered by measures to counter the financial market instability that resulted from large capital outflows, which had led to sharp falls in asset prices and the exchange rate," it added.
The OECD forecast comes amid growing signs that South Korea is emerging from what many see as the worst downturn in more than a decade, sparked by the financial and economic turbulence that started late last year.
Korea unveiled diverse economic stimulus measures to combat the downturn, frontloading its budget, reducing taxes and keeping its key interest rate at a record-low level.
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.
Earlier in the day, Finance Minister Yoon Jeung-hyun said the government expects that the 2010 growth will be stronger than his previous forecast. The government anticipates that the economy will contract 1.5 percent this year before rebounding 4 percent next year.
The OECD said Korea has achieved "one of the earliest and strongest" recoveries among its member countries, but it called for the government to consider rolling back stimulus measures introduced over the past year to bolster demand and kick-start the economy.
(Source: The Korea Herald)
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