Global financial crisis to affect economic growth: gov`t

SEOUL, Oct. 6 (Yonhap) -- The global financial crisis is expected to cause economic growth to fall below the upper 4 percent range predicted earlier in the year, the government said Monday.

In a report to the National Assembly, the Ministry of Strategy and Finance said
fallout from the Lehman Brothers bankruptcy in mid September may last for some
time and hurt economies around the world.
The Lee Myung-bak administration, which took office in February, had pledged 7
percent growth during its election campaign last year, but had lowered this to
the upper 4 percent range to reflect unfavorable developments.
The report said that after pulling off 5.3 percent growth in the first half,
gains will likely dip to 4 percent between July and December.
South Korea, which has maintained a trade surplus for the past decade, reported a
deficit of US$12.6 billion in the first eight months of this year, while its
external debts reached $419.8 billion as of June, from $382.2 billion last year.
The top economic policymaking ministry also said Seoul plans to take all
necessary steps to prevent the domestic financial market from being seriously
affected by any liquidity crunch. It said measures including speedy
implementation of broad tax cuts and government spending plans should help
breathe life into the sluggish economy.
"If uncertainties can be minimized, the economy should be able to make a comeback
in the second half of 2009," Finance Minister Kang Man-soo told lawmakers.