May 12, 2009

South Korean economic crisis abating

South Korean Finance Minister Yoon Jeung-hyun said the country did not need to worry about a shortage of cash reserves similar to a crisis in 1997.

Considering major indicators unveiled recently for our economy, chances are slim that we might face a financial crisis, he said, the Yonhap News Agency reported Tuesday.

With current and trade accounts remaining in the black and foreign investments pouring into the local stock market, foreign reserves are expanding and the exchange rate is trending down, he said.

The South Korean economy is expected to show negative growth in 2009 for the first time in more than 10 years. But, recent data suggest a recovery has begun.

Industrial production declined in March 10.6 percent from March 2008, but grew 4.8 percent compared to February, Yonhap said.

The decline in exports also slowed recently, falling 19 percent in April, compared to a 22 percent drop in March.

Yoon said, positives and negatives coexist.

At this point, I think that it would not be desirable either to fall overly into optimism or have groundless pessimism. We shouldn't be swayed by daily developments, but take a longer breath and closely monitor indicators and global economic trends.