TOPKorea cushions economy against eurozone crisis

Korea cushions economy against eurozone crisis

By admin

Avatar

By admin

Korea is trying to cushion impacts of the looming euro zone crisis with economic support measures worth 8.5 million won ($7.4 billion), Bloomberg reports.

According to The Korea Herald, the Finance Ministry lowered forecasts for the nation’s economic growth from estimates of 3.5% to 3.3%, nodding to IMF and OECD earlier predictions. The ministry said that Korea is likely to experience a gradual economic recovery next year.

Kim Nam Hyun, a Seoul-based fixed income analyst at Eugene Investment & Futures told Bloomberg that “the European debt crisis is such a big challenge that South Korea will have to struggle to meet even the lowered growth target”. The additional spending should stimulate GDP growth by 0.25% per annum by promoting investments and assisting small businesses and low-income earners.

Employment rates will also increase by 400,000 year-on-year as demand for health care workers grows. Consumer prices growth will remain at 2.8%, lower than the expected 3.2%, according the the ministry.

Despite external threats and weak growth momentum,  South Korea’s economy “is fairing well given deteriorating external conditions,” said the Finance Ministry’s director-general, Choi Sang Mok.