|
|
|
|
Mixed signals in
Seoul
SEOUL - Fueled by
rising exports, the South Korean economy expanded
in the fourth quarter at the fastest pace in a
year, but by a lower than expected rate as falling
private consumption offset brisk exports, the
country's central bank said on Tuesday. The
economy expanded 4.6% last year after a 3.1%
growth in 2003.
In the fourth quarter, the
real gross domestic product (GDP) climbed 3.3%
from a year earlier, the Bank of Korea (BOK) said
in a preliminary report. If seasonal factors are
taken into account, the real, or price-adjusted,
GDP grew 0.9% in the October-December period from
the previous three months. Though the 2004 GDP
gain was up from the 3.1% increase in 2003, it was
lower than the central bank's estimate of 4.7% and
private economists' 4.8% forecast.
In
local currency terms, nominal GDP gained 7.4% from
a year earlier to 788.4 trillion won (US$781.3
billion), while it rose 11.9% to $680 billion in
dollar terms. Private consumption fell 0.5% in
2004 from the previous year as consumers sharply
cut spending on cars, electronics and other goods.
In the fourth quarter, it inched up 0.6%.
Corporate capital spending rose 3.8% last year and
2.5% in the last three months. Exports rose 19.7%
in 2004, helped by good figures in
telecommunication, semiconductor and electronics.
These advanced 9.8% in the last three months of
the year. In comparison, imports rose 13.8% in
2004 and 11.1% in the fourth quarter.
The
seasonally-adjusted unemployment rate fell to 3.5%
in February due to a job rise in services, the
state statistics office said. The unadjusted
unemployment rate increased to 4% last month from
3.9% in January. With seasonal factors taken into
account, however, the jobless rate was estimated
at 3.6% - the same as in January, according to the
survey of 11 domestic and foreign financial
institutions. The unadjusted jobless rate fell to
3.2% in September before inching up to 3.3% in
October. It was steady in November before rising
to 3.7% and 3.9% in December and January
respectively.
A combination of the weak
dollar, high crude oil prices and weak stock
markets is raising concerns that South Korea's
economic recovery could lose steam before it gains
full momentum. Various signs are emerging that the
Korean economy is shaking out of a long recession,
with the benchmark Korea Composite Stock Price
Index rising to an year high of 1,022.79 on March
11.
Exports have also done well, exceeding
the $20-billion mark in February for the six
straight month, despite the strong won versus the
dollar and high crude prices that raised the
production costs of goods made in the country.
Experts noted that recent positive trends in the
South Korean economy, in some part, are connected
to market expectations that oil and foreign
exchange rates will stabilize. They added that the
rise in the stock market was fueled by net buying
of foreign investors that cannot continue
indefinitely unless there are tangible gains in
companies' profits.
Experts say that high
crude oil prices could crimp a revival of the
Korean economy. South Korea is the world's fourth
largest importer of crude oil. Government
officials had predicted that oil prices would
begin to drop in April but that is unlikely to
happen because demand is expected to continue to
surpass supply. China has become a major importer
of oil, which contributes to a rise in
international prices, with global hedge funds
cashing in on the supply-demand imbalance.
"At the present rate, oil prices may fall
off a bit in the second quarter but they could
easily rebound going into the second quarter," a
government energy policymaker said. Experts
believe that the picture in the stock market was
not bright either, since a rise in oil prices and
the prospect of the US Federal Reserve raising
interest rates again could cause many foreign
investors to pull out of the market. The main
stock index fell to 979.72 at the end of trading
last week after staying above the 1,000-point mark
for just two days.
"Unless there is a
turnaround in circumstances, the market may remain
in the upper 900 for some time," said a market
watcher for the Korea Exchange. Many private
analysts are predicting that the Korean won may
gain versus the US greenback. The won rose from
over 1,150 won to the dollar last year to 995 won
to the dollar as of last week. This could fall to
around 900 won to the dollar by the year's end
according to some experts.
A stronger won
is good for imports and makes it cheaper to bring
in oil, yet it undermines the price
competitiveness of South Korean products abroad. A
stronger won could prod overseas investors to sell
off their stock and other holdings in South Korea,
convert them into dollars and send their profits
abroad. Some figures indicated that foreign
investors had sold off 1.24 trillion won worth of
stocks in the last 12 days and sent most of their
gains abroad.
South Korean share prices
are likely to suffer further corrections this week
on concerns about first-quarter corporate earnings
and rising oil prices. Investors will also have to
pay a close attention to an upcoming rate policy
decision by the US Federal Reserve, dealers said.
"Investors' buying interests may remain weak
before the corporate earnings season kicks off,"
said Kang Hyun-chul, an analyst at LG Investment
& Securities. "Yet after a much-expected
interest rate hike in the US, the local market
could stage a technical rebound." South Korea's
key stock index dropped 3.9% last week, extending
its losing streak, hurt by rising oil prices,
earnings concerns about technology companies and a
continued sell-off by foreign investors.
(Yonhap/Asia Pulse) |
|
|
|
|
|
|
|
 |
|
|
|
|
|
All material on this
website is copyright and may not be republished in any form without written
permission.
© Copyright 1999 - 2005 Asia Times
Online Ltd.
|
|
Head
Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong
Kong
Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
|
Asian Sex Gazette Korean Sex News
|
|
|
