Experts Expect New Administration Will Help Economic Recovery

Six out of ten economic experts predict that the Korean economy would be better next year. The majority of them said that the Lee Myung-bak administration will contribute to economic recovery, and many businesses are now considering another expansion in investment. The top priority that the new government should set is easing regulations on businesses, followed by a boost in the economy by reforming the public sector, encouraging the development of small businesses, and investing in infrastructure.

This newspaper’s economic department conducted a survey titled “2008 Korean Economy Forecasts and Challenges” among 100 economic experts, including CEOs and board members of companies and financial institutions, professors, and heads of economic research institutes.

The survey showed that 65 of 100 respondents said the overall, the Korean economy would get better next year.

To the question whether the new administration would help revive the economy, 82 people said ‘somewhat’ and 12 said ‘very much’, exhibiting the great hope on President-elect Lee Myung-bak. To the question on next year’s economic growth rate, 45 people said, ‘between 4.5 and 5.0 percent’, 28 said ‘over 5.0 percent’, and 22 said ‘between 4.0 and 4.5 percent’.

As for the economic policies adopted the new administration, 83 people mentioned were regulations released by the government as a top priority.

When answering the question about the big corporate business environment, 69 people said, “it will get better somewhat,” while only six said, “It will get worse.” In the same survey conducted last year, only 11 people responded positively.

57 people said that the small and medium-size business environment will get better somewhat or very much.

26 out of 35 businessmen (74 percent) who participated in the poll showed a willingness to invest more than this year.

Experts mentioned the rise in raw materials, including oil prices (64 people) and financial threats triggered by the sub prime mortgage crisis (62 people), as risks that can bring instability to the Korean economy.

61 people answered negatively on the economic policies of the Roh administration, while only six answered positively.

The respondents consisted of 30 corporate CEOs and board members, 30 CEOs and board members of financial institutions such as banks, insurance, credit card and securities companies, 20 economics and business professors, 10 heads of public and private think-tanks, five heads or board members of five major economic trade associations, and five CEOs of venture companies.