Print

Mail

wiki links

S Korea posts growth as confidence wanes

South Korea's economy trundled along at a modest pace in the second quarter helped by consumer spending, but economists said a gloomy electronics sector and a recent downturn in consumer confidence suggested bad times ahead.

Korea's economy has fared better than regional peers such as Japan and Taiwan which are flirting with recession. But analysts said the going could get tougher and pointed to stop-start efforts to restructure the corporate sector.

Gross domestic product (GDP) rose a provisional 0.5 percent quarter-on-quarter, broadly in line with expectations, compared with a 0.3 percent climb in the previous quarter, the central Bank of Korea said in a statement yesterday.

The data followed early comments by Finance Minister Jin Nyum saying growth this year could be around 3 percent, lower than the ministry's forecast of 4 percent.

"The reason Korea's economy is relatively better than other `Asian tigers' is Korea has done more reform than any other Asian country," Chi Lo, head of treasury research at Standard Chartered in Hong Kong, said by telephone.

State-owned creditors have spearheaded a spate of high-profile asset sale deals which are seen as crucial to boosting confidence in an economy which recovered from the 1997 Asian financial crisis but is now facing a renewed slowdown.

But some key sell-offs have yet to materialize. State-owned creditors have tried to sell insolvent Daewoo Motor since 1999 and stakes in Hyundai financial units for more than a year.

Yesterday, the finance minister said both deals would be concluded shortly.
This story has been viewed 1673 times.