South Korea’s economy recorded its strongest growth in more than five years in the second quarter as increased government spending and record low interest rates insulated it from the global recession.
Asia’s fourth-largest economy expanded 2.3 percent quarter-on-quarter in the three months ended June 30, the Bank of Korea said yesterday in a report.
South Korea joins Singapore and China among the Asian nations that have released stronger growth figures in recent weeks — another sign the region is emerging from the world’s worst downturn in decades.
There are doubts, however, whether South Korea and Asia’s upturn will be sustained once the effects of government pump priming wear off.
Kang Chang-ku, an economist at the central bank, said the last time GDP grew more was in the fourth quarter of 2003 when it expanded 2.6 percent. The second quarter figures are preliminary and may be revised.
The expansion marked the second straight quarter of growth for Asia’s fourth-largest economy after a contraction in the final quarter of last year.
It eked out a 0.1 percent gain quarter-on-quarter in the first quarter after a contraction of 5.1 percent in the previous quarter.
But the result was not all good news and showed that some fragility remains.
For example, when compared with the same period last year, South Korea’s economy shrank 2.5 percent. That marked the third straight quarter of year-on-year shrinkage.
The last time that happened was in 1998, when GDP contracted from the previous year in all four quarters, said Kang, the central bank economist.
Kwon Goohoon, an economist at Goldman Sachs in Seoul, said in a note that South Korea’s growth was “driven by a good mix of strong fiscal stimulus, a weak KRW [South Korean won] and monetary easing.”
He expressed doubt, however, that such a strong performance would be repeated the rest of the year as fiscal stimulus wanes and credit expansion slows.
In his National Day Rally speech on Sunday, Singaporean Prime Minister Lawrence Wong (黃循財) quoted the Taiwanese song One Small Umbrella (一支小雨傘) to describe his nation’s situation. Wong’s use of such a song shows Singapore’s familiarity with Taiwan’s culture and is a perfect reflection of exchanges between the two nations, Representative to Singapore Tung Chen-yuan (童振源) said yesterday in a post on Facebook. Wong quoted the song, saying: “As the rain gets heavier, I will take care of you, and you,” in Mandarin, using it as a metaphor for Singaporeans coming together to face challenges. Other Singaporean politicians have also used Taiwanese songs
CHIPMAKING INVESTMENT: J.W. Kuo told legislators that Department of Investment Review approval would be needed were Washington to seek a TSMC board seat Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said he received information about a possible US government investment in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and an assessment of the possible effect on the firm requires further discussion. If the US were to invest in TSMC, the plan would need to be reviewed by the Department of Investment Review, Kuo told reporters ahead of a hearing of the legislature’s Economics Committee. Kuo’s remarks came after US Secretary of Commerce Howard Lutnick on Tuesday said that the US government is looking into the federal government taking equity stakes in computer chip manufacturers that
NORTHERN STRIKE: Taiwanese military personnel have been training ‘in strategic and tactical battle operations’ in Michigan, a former US diplomat said More than 500 Taiwanese troops participated in this year’s Northern Strike military exercise held at Lake Michigan by the US, a Pentagon-run news outlet reported yesterday. The Michigan National Guard-sponsored drill involved 7,500 military personnel from 36 nations and territories around the world, the Stars and Stripes said. This year’s edition of Northern Strike, which concluded on Sunday, simulated a war in the Indo-Pacific region in a departure from its traditional European focus, it said. The change indicated a greater shift in the US armed forces’ attention to a potential conflict in Asia, it added. Citing a briefing by a Michigan National Guard senior
CLAMPING DOWN: At the preliminary stage on Jan. 1 next year, only core personnel of the military, the civil service and public schools would be subject to inspections Regular checks are to be conducted from next year to clamp down on military personnel, civil servants and public-school teachers with Chinese citizenship or Chinese household registration, the Mainland Affairs Council (MAC) said yesterday. Article 9-1 of the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例) stipulates that Taiwanese who obtain Chinese household registration or a Chinese passport would be deprived of their Taiwanese citizenship and lose their right to work in the military, public service or public schools, it said. To identify and prevent the illegal employment of holders of Chinese ID cards or
RSS