KDI, “Economic Recovery to Slow Down”

A government-run research institute the Korea Development Institute (KDI) announced on the 10th that economic recovery could slow down due to the fall of semiconductor price and uncertainty of U.S. economic recovery. However, KDI forecasted that the call rate recently increased 0.25 percent by the Bank of Korea would influence little on the financial market and family finances.

In the report titled `Economic Trend in April`, KDI said, “while recent economic indicators show the possibility of economic recovery continuing further with the slowly recovering businesses, we found some factors that might slow down the pace of recovery. ”

The report pointed △ weakening semiconductor price and △ bearish stock market from the weakened positive view on the U.S. business in April as the causes of the slowdown of economic recovery.

However, KDI said, “the expectation on the flourishing business is still ongoing,” quoting △ National Statistical Office’s leading indicators that is unceasingly going upward since July last year and △Federation of Korean Industries’ business sentiment index that hit record high in May. KDI added, “business shows typical characteristics of recovering business as jobless rate is stable with 3.4 percent in March, and the number of economic activity and employed persons increased by 2.4 percent and 3.8 percent from the same period last year. ”

Rae-Jeong Park ecopark@donga.com