ID :
28781
Thu, 11/06/2008 - 19:28
Auther :
Shortlink :
http://m.oananews.org//node/28781
The shortlink copeid
Global financial woes weigh on economy: report
SEOUL, Nov. 6 (Yonhap) -- The ongoing global financial woes continued to put a damper on domestic demand and employment here, sparking fears that it could undermine the Asian country's economic growth, a government report said Thursday.
"With global financial turmoil translating into worldwide economic contraction,
domestic demand is also slowing down at a fast pace and growth with employment
and growth on a downward move," the Finance Ministry said in its monthly report
analyzing economic trends.
"Top priority should be placed on stabilizing foreign exchange and other
financial markets in a preemptive way. The government should also increase fiscal
spending to stimulate the real part of the economy and help ease difficulties of
small businesses and ordinary people," it added.
The estimate provides a snap shot of South Korea's economy, which is currently
gripped by global financial turbulence which started in the U.S. in September
when major investment banks collapsed.
Government policymakers and other private experts have been rushing to stabilize
hard-hit local currency and stock markets with a raft of measures including a
US$30 billion currency swap deal with the U.S., which helped ease growing jitters
over a credit crunch.
Still, the fallout from the months-long financial instability is spilling over
into the real part of the local economy. The Bank of Korea (BOK), the central
bank, earlier said that gross domestic product expanded 0.6 percent in the third
quarter from three months earlier, the slowest rate in four years.
Consumption and employment were also in a doldrums on dim economic indicators.
Consumer sales in September declined 2 percent from a year earlier, while the
number of new jobs last month stood at 112,000, far short of the government's
annual target of 200,000.
Export growth, the backbone of the nation's economic growth, slowed down sharply.
October exports grew 10 percent to $37.8 billion from a year earlier but
decelerated from a 22.9 percent advance a year earlier.
Last week, the BOK slashed its key interest rates by a record 0.75 percent to
4.25 percent to stimulate the slumping economy and is widely expected to make an
additional cut when it meets on Friday.
On Monday, the government unveiled a sweeping economic stimulus package including
a 10-trillion won increase in 2009 budget spending and expanded tax incentives.
Fortunately, inflation is showing signs of letting up mainly thanks to recently
falling crude oil prices. Consumer prices jumped 4.8 percent in October, slowing
down from a 10-year peak of 5.9 percent in July. A decrease in inflationary
pressure provides more leeway for interest rates cuts, observers say.
kokobj@yna.co.kr
(END)
"With global financial turmoil translating into worldwide economic contraction,
domestic demand is also slowing down at a fast pace and growth with employment
and growth on a downward move," the Finance Ministry said in its monthly report
analyzing economic trends.
"Top priority should be placed on stabilizing foreign exchange and other
financial markets in a preemptive way. The government should also increase fiscal
spending to stimulate the real part of the economy and help ease difficulties of
small businesses and ordinary people," it added.
The estimate provides a snap shot of South Korea's economy, which is currently
gripped by global financial turbulence which started in the U.S. in September
when major investment banks collapsed.
Government policymakers and other private experts have been rushing to stabilize
hard-hit local currency and stock markets with a raft of measures including a
US$30 billion currency swap deal with the U.S., which helped ease growing jitters
over a credit crunch.
Still, the fallout from the months-long financial instability is spilling over
into the real part of the local economy. The Bank of Korea (BOK), the central
bank, earlier said that gross domestic product expanded 0.6 percent in the third
quarter from three months earlier, the slowest rate in four years.
Consumption and employment were also in a doldrums on dim economic indicators.
Consumer sales in September declined 2 percent from a year earlier, while the
number of new jobs last month stood at 112,000, far short of the government's
annual target of 200,000.
Export growth, the backbone of the nation's economic growth, slowed down sharply.
October exports grew 10 percent to $37.8 billion from a year earlier but
decelerated from a 22.9 percent advance a year earlier.
Last week, the BOK slashed its key interest rates by a record 0.75 percent to
4.25 percent to stimulate the slumping economy and is widely expected to make an
additional cut when it meets on Friday.
On Monday, the government unveiled a sweeping economic stimulus package including
a 10-trillion won increase in 2009 budget spending and expanded tax incentives.
Fortunately, inflation is showing signs of letting up mainly thanks to recently
falling crude oil prices. Consumer prices jumped 4.8 percent in October, slowing
down from a 10-year peak of 5.9 percent in July. A decrease in inflationary
pressure provides more leeway for interest rates cuts, observers say.
kokobj@yna.co.kr
(END)
