Major Economies See Growth in 2nd Quarter

Faster recovery in major economies such as the United States, European Union and Japan is expected to give a boost to the Korean economy.

Recovery in Korea’s major export destinations will significantly help restore the export-driven Korean economy.

The Strategy and Finance Ministry yesterday released a report on growing expectations of economic recovery based on the dramatic growth in the second quarter in major economies. Japan, Germany and France saw positive quarter-on-quarter growth for the first time in five quarters.

In Japan, second-quarter GDP growth from the first quarter was 0.9 percent, a turnaround after four consecutive quarters of negative growth. In particular, production in the car and semiconductor industries showed dramatic growth.

The EU economy contracted 0.1 percent in the second quarter for the fifth straight quarter, but fared better than the first quarter’s drop of 2.5 percent. The EU’s purchasing managers’ index recovered to the 50-point level for the first time in 15 months, and its business confidence index (80.6) rose for the fifth consecutive month.

In the U.S., GDP growth was negative 1.0 percent in the second quarter, up from negative 6.4 percent in the first. Industrial production in July increased 0.5 percent from June, a first since October last year, as the auto industry began to rebound thanks to the “cash for clunkers” program for trading in used cars for money.

The Federal Reserve quoted minutes of the Federal Open Market Committee last month as saying the U.S. economic downturn is nearing an end, adding growth will resume after the second half of this year.

Korea’s current account balance last month is expected to reach 1.5 billion dollars, a significant drop from June’s 5.43 billion dollars and July’s 4.4 billion dollars. This is because the increase in import volume resulted in an estimated trade surplus of 1.7 billion dollars last month.

lovesong@donga.com