ID :
204930
Fri, 09/02/2011 - 16:43
Auther :
Shortlink :
https://oananews.org//node/204930
The shortlink copeid
Heed warning signs of economic crisis
(Yonhap Editorial)
SEOUL, Sept. 2 (Yonhap) -- Potential for a downturn in the South Korean economy has been rising due to a retreat in the global economy. Growth of industrial production and exports has dwindled and inflation has soared to a three-year peak. The government lowered its prediction for the nation's economic growth from 5.0 percent to 4.5 percent two months ago but the revised growth target seems to be difficult to attain. Finance Minister Bahk Jae-wan recently hinted that the government's growth outlook for this year could be revised downward, citing lingering uncertainty.
Consumer prices surged 5.3 percent last month, pushed up by the sharp growth in the prices of farm and fisheries products and home rental prices.
The outlook for future economic growth is even dimmer as concerns about the slowdown in the U.S. economy and Europe's financial crisis have not calmed down.
Various economic indicators show the gloomy prospects of future economic performances. The growth of production in the mining and manufacturing sectors remained at 3.9 percent in July from a year ago, marking the lowest increase since September last year. On a month-by-month basis, production in that sector recorded a drop of 0.4 percent. Exports also recorded a slow increase in August with the trade surplus reaching just US$800 million.
The business survey index (BSI) for September compiled by the Federation of Korean Industries stands at 96.3, lower than the level for August at 98.9. A BSI lower than 100 indicates a pessimistic outlook for future business surpasses an optimistic outlook. The Bank of Korea's BSI also retreated to 80 in August from 91 in July.
The government says these "abnormal" signs are not worrisome, as they are seasonal, temporary factors, although many private experts have expressed deep concerns.
The U.S. economy portends a further slowdown following the downgrade of its sovereign rating. The White House adjusted down this year's economic growth target from 2.7 percent to 1.7 percent, indicating that the economic slowdown has started.
The future course of the financial crisis in European countries, including Greece, Spain and Italy, is also uncertain.
Retrenchment in finance and a slowdown in the economies of Korea's major trade partners are sure to shrink the nation's exports.
Domestically, the size of household debts reached a critical level while inflation surpassed the 5 percent mark, shrinking consumption. The size of household debts surged substantially amid sharp price rises in August despite the government's efforts to contain them. Household loans extended by financial institutions are estimated to have grown by more than 5 trillion won (US$4.66 billion) in August despite the regulator's efforts to curb home debt while consumer prices also recorded 5.3 percent growth last month, the highest in three years.
The government should not overlook warning signs for potential economic crisis and must work hard to find effective countermeasures befitting various demands.
SEOUL, Sept. 2 (Yonhap) -- Potential for a downturn in the South Korean economy has been rising due to a retreat in the global economy. Growth of industrial production and exports has dwindled and inflation has soared to a three-year peak. The government lowered its prediction for the nation's economic growth from 5.0 percent to 4.5 percent two months ago but the revised growth target seems to be difficult to attain. Finance Minister Bahk Jae-wan recently hinted that the government's growth outlook for this year could be revised downward, citing lingering uncertainty.
Consumer prices surged 5.3 percent last month, pushed up by the sharp growth in the prices of farm and fisheries products and home rental prices.
The outlook for future economic growth is even dimmer as concerns about the slowdown in the U.S. economy and Europe's financial crisis have not calmed down.
Various economic indicators show the gloomy prospects of future economic performances. The growth of production in the mining and manufacturing sectors remained at 3.9 percent in July from a year ago, marking the lowest increase since September last year. On a month-by-month basis, production in that sector recorded a drop of 0.4 percent. Exports also recorded a slow increase in August with the trade surplus reaching just US$800 million.
The business survey index (BSI) for September compiled by the Federation of Korean Industries stands at 96.3, lower than the level for August at 98.9. A BSI lower than 100 indicates a pessimistic outlook for future business surpasses an optimistic outlook. The Bank of Korea's BSI also retreated to 80 in August from 91 in July.
The government says these "abnormal" signs are not worrisome, as they are seasonal, temporary factors, although many private experts have expressed deep concerns.
The U.S. economy portends a further slowdown following the downgrade of its sovereign rating. The White House adjusted down this year's economic growth target from 2.7 percent to 1.7 percent, indicating that the economic slowdown has started.
The future course of the financial crisis in European countries, including Greece, Spain and Italy, is also uncertain.
Retrenchment in finance and a slowdown in the economies of Korea's major trade partners are sure to shrink the nation's exports.
Domestically, the size of household debts reached a critical level while inflation surpassed the 5 percent mark, shrinking consumption. The size of household debts surged substantially amid sharp price rises in August despite the government's efforts to contain them. Household loans extended by financial institutions are estimated to have grown by more than 5 trillion won (US$4.66 billion) in August despite the regulator's efforts to curb home debt while consumer prices also recorded 5.3 percent growth last month, the highest in three years.
The government should not overlook warning signs for potential economic crisis and must work hard to find effective countermeasures befitting various demands.
