November 9, 1999 
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| November 9, 1999 | atimes.com | |
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| The Koreas Figures tell the story of nation's recovery SEOUL - The dramatic changes in South Korea's economic indicators over the past two years since the government asked for a record $58 billion bailout from the International Monetary Fund show the drastic turnaround in the nation's economic profile. Economic growth, which had reached 6.8 percent in 1996 and 5 percent in 1997, plunged to minus 3.6 percent in the first quarter of 1998, minus 7.2 percent in the second and minus 7.1 percent in the third. The increase rate of consumer prices rose from 4.5 percent in 1997 to 8.9 percent in the first quarter last year, 8.2 percent in the second and 7.5 percent for all of 1998. The unemployment rate hit a record-low in 1997 of around 2 percent but it shot up to 6.8 percent or 1.46 million people last year. Real estate prices tumbled as a result of an oversupply of land on the selling block. Stock prices also plunged as the benchmark price index fell to 406.1 points on average in 1998 from 654.5 in 1997. With the won's plunge against the US dollar, per capita income fell to $6,823 last year from $11,380 in 1996 and $10,307 in 1997. Signs of an economic turnaround, however, began to surface in the latter half of 1998. Economic growth swung back to plus 4.6 percent during the first quarter this year from minus 5.3 percent in the fourth quarter of 1998. Economic growth hit 9.8 percent during the second quarter of this year and 11.1 percent during the third. Inflation has remained unprecedentedly stable at 0.7 percent until the end of October. The unemployment rate fell to 4.8 percent at the end of September. Industrial production continued to decline last year but has risen to the 20 percent level so far this year. Operating rates at factories have regained theirs level before the economic crisis. Foreign exchange reserves, which were almost fully depleted in November 1997, have hit a record-high $65 billion. Korea has emerged as net creditor country. The foreign exchange rate has remained stable at around 1,200 won to the dollar after hitting a low of 2,000 won during the height of the crisis. A large factor behind the turnaround is the current-account surplus, which surpassed $40 billion in 1998 alone. Foreign exchange reserves came close to $50 billion at the end of 1998, eliminating any possibility of a foreign exchange crisis recurring. As the foreign exchange rate entered a stable phase from the second quarter of 1998, the government instituted a policy of low interest rates and monetary expansion, a shift that is credited with creating momentum to spur domestic demand. Government-led restructuring saw thousands of workers lose their jobs and the injection of trillions of won in public funds. But it also led to the shutdown of nonviable businesses and helped to improve the financial health of viable companies, thus making a decisive contribution toward recovering Korea's credibility. Despite the progress in restructuring, the Korean economy is fraught with lingering jitters arising from corporate and financial insolvencies. The nation must also resolve the fate of the cash-strapped Daewoo Group without incurring a credit crunch. (Asia Pulse/Yonhap) | |||||||||
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