Turbid Economic Recovery

Kang Bong-Kyun, the director of the Korea Development Institute (KDI), told yesterday that although the Gross Domestic Product (GDP) of the first quarter certainly has increased over the last quarter of last year, it is hard to prospect the economic situation of the second half of this year.

Director Kang revealed a dim economic prospect in a Wednesday policy meeting held by the National Strategy Institute (NSI). He said that while there have been conflicting opinions on the US economy`s recovery, the US economy will not recover as quickly as once expected.

Meanwhile, a report released by the Samsung Economic Research Institute also recently told that the domestic economic situation is improving, but it is hard to expect such a quick recovery.

This report analyzed that the economic index has improved and the economic downturn has reversed. For the report, the increase rate of industry production rose 0.5 percent (the first quarter of this year) from –3.2 percent (the previous quarter), and business survey index recorded 115.5 point.

But the report expressed the skeptical opinion about the early economic recovery, pointing out that the exports during March and April decreased respectively by 1.8 percent and 9.3 percent. The facility investment has declined continuously since last November and the financial market has been vulnerable to the extent that it responded hyper-sensitive to external shocks.

Kwon Soon-Hwal shkwon@donga.com