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 IMF positive about Korea's economy
manager 님의 글입니다. 2006-06-09 08:40:01, Hit : 3,464, Vote : 740

The International Monetary Fund (IMF) has said that the outlook for the South Korean economy is bright, with gross domestic product expected to reach as high as 5.5 percent this year.

"We believe that Korea's economy will grow by about 5.5 percent this year, somewhat faster than the government expects," Joshua Felman, assistant director in the IMF's Asia-Pacific Department, said after consultations in Seoul.

He said the main reason for optimism is that Korea is continuing to benefit from its integration into the world economy. "Exports are growing rapidly ... Meanwhile, domestic demand is robust, ensuring that growth remains well-balanced."

As possible risks, Felman cited higher oil prices and the tightening of global financial conditions, adding Korea's aging population is a significant longer-term challenge.

"The answer, in our view, lies in furthering Korea's integration into the world economy." He said the service sector should be thrust into the global arena, as was the manufacturing sector a few decades ago.

He also advised speeding up deregulation to improve small and startup firms' access to financing. "While Korea is very good at creating new firms, it's less successful in making them grow." Felman said firms with valid ideas and contracts but no collateral should have access to bank credit. He also advised the national pension system should restore financial stability immediately, as it will cost more as time goes by.

Regarding Asian countries' IMF voting rights, he said there is a lot of discussion going on. He agreed Korea's voting right is far below what it deserves.

He said the IMF supported government plans to liberalize the foreign currency market. "In sum, Korea is moving in the right direction."

Date: June 09, 2006  

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