Economy Expected to Pick Up in the Fourth Quarter

The governor of the Bank of Korea Park Seung announced on July 25 that the Korean economy would start to recover beginning from the fourth quarter (October to December) and will grow at 4 to 5% next year.

At the Jeju Summer Forum co-hosted by Korea Management Association and Korea Foreign Trade Association at Hotel Shilla, the governor said that the sluggishness of the economy is prolonged into the third quarter (July to September), and forecasted that a comprehensive economic stimulus package, including the BOK`s interest rate cut together with the government`s plan on supplementary budget of over five trillion won and tax reforms, would help the economy rebound into a recovery phase starting from the fourth quarter.

Until recently Park had said, “The second quarter has certainly hit the bottom but it is difficult to expect when it would start to turn around.”

“Korea`s major exporting country China is maintaining its high growth rate and the economic situations in the US and Europe will regain vitality next year,” Park emphasized, “Although it might seem difficult for now, there are internal research results that prove that 4 to 5% growth rate is possible next year.”

Kwu-Jin Lim mhjh22@donga.com