[Reporter¡¯s View] Overly optimistic view of financial situation

Officials of the Ministry of Finance and Economy in charge of financial policies look conspicuously bright of late. They seem happy because the stock and money markets, which lately had shown no signs of reviving at all, have appeared to enter a normal path to some extent.

They also are busy making publicity of the positive trend in the markets by releasing press releases with headlines such as ¡°Good circulation in money market¡± and ¡°Inflow of foreign money for stock investment.¡±

The over-the-counter Kosdaq index recorded its highest level in three months by exceeding 80 points Jan. 22, the eve of the three Sollal, or lunar New Year¡¯s Day holidays, and the Korea Composite Stock Price Index also reached the level of 630 points.

The corporate bond market, which has been frozen, appeared to be somewhat vigorous. Some leading firms¡¯ bills are being discounted at Myongdong curb loan market again. Some stock investors say that they enjoyed good profits in their investment in the Kosdaq market this year.

However, experts¡¯ reactions are mixed. ¡°It is true that the current trend in the financial market is desirable, but it is still a question whether there is any substantiality in the trend,¡± a brokerage official said. ¡°Using the human body as an analogy, the blood just started to circulate.¡±

They speculated that an artificial financial market was being set up with the rush of money into it thanks to the implementation of measures to boost the money and stock markets, the second round of public fund injections amounting to 50 trillion won, decision to execute budget at an early date and inflow of foreign funds.

They explain that it is difficult to see it as a substantial trend expected to increase corporate profits.

Amid this trend, however, major international conditions that affect the Korean economy are entering a worsening phase. The Japanese yen has been continuously devaluated, while the international crude oil prices that entered a downward stabile trend at the end of last year are gearing up again. There also are warnings of signs of economic stagnation in the United States.

A consensus that there is an ongoing economic crisis has been created to a considerable degree, but it also is dangerous to be obsessed with excessive optimism, ignoring the minefield ahead.

The government should not forget how much it hurt the national economy and had small stock investors shed tears by popping the champagne too early ahead of the April 13 general elections last year.

Kwon Soon-Hwal shkwon@donga.com