Government Decides to Strengthen Market Trend Inspection

On the 23rd, the government held “a meeting to examine the economic trend” presided over by the assistant secretary of the Ministry of Finance and Economy (MOFE) Kim Young-joo and attended by chief directors of economic ministries and agencies. They decided to strengthen economic trend examination and management system because the international and domestic economic conditions are uncertain.

This meeting was held on the request of President-elect Roh. He directed to strengthen the examination on the international and domestic economic trend because domestic and international economic trend could be neglected in the time of transition, as ministers and deputy ministers of economic ministries and agencies are object of appointment.

In this meeting, the government concluded main economic entities such as the U.S., Japan, Europe and China are more stagnant than expected.

Especially, regarding the U.S. economy which has great influence on Korea economy, the government expressed its concerns, saying ＂Due to the structural weakness, many think that we cannot take an optimistic view on economic recovery regardless the progress of war on Iraq.＂ Actually, the U.S. main institutions such as JP Morgan and Morgan Stanley lowered their expected growth rate of the U.S. this year around 0.1% point. As the international conditions get worse, domestic consumers’ and investor’s sentiments are chilled so the sensible economy is getting worse. However, recent trade balance deficit is a temporary phenomenon resulting from the increased oil price so the export is still active, according to the analysis. Therefore, the government decided to examine market trend of each sectors including import/export, finance and oil prices and to make elastic measures if needed.

Kwang-Hyun Kim kkh@donga.com