S. Korean economy bottoming out: think tank

SEOUL, June 14 (Yonhap) -- The South Korean economy, Asia's fourth-largest, is bottoming out of the worst slump in more than 11 years or is expected to hit bottom soon, a private think tank said Sunday.

"In light of manufacturing production and other key macroeconomic indicators, the
economy has passed the worst situation and is moving in an improving direction,"
said the Korea Institute of Finance (KIF).
Jang Min, a KIF researcher based the assessment on the fact that the country's
index of leading economic indicators rose in April for the fourth consecutive
month.
"In light of past records, the Korean economy tend to bottom out three to seven
months after its index of leading indicators turned around," he said.
The economist, however, was cautious about what pattern of a recovery the economy
will show down the road.
"Despite improving indicators, the prospect for export-related conditions remains
not so bright," he said. "South Korea's overseas shipments may be weighed down by
rising oil and commodity prices."
Since domestic demand is also unlikely to make a full-fledged recovery soon, the
South Korean economy is expected to "move sideways" for a considerable period of
time, Jang predicted.
The South Korean economy barely averted a technical recession in the first
quarter by growing 0.1 percent from three months earlier. The slight increase
contrasted with a 5.1 percent quarterly plunge in the last quarter of 2008.
The Bank of Korea, the country's central bank, predicts that the economy will
shrink 2.4 percent for all of this year, hit by falling exports and anemic
domestic demand.
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