Seoul posts 8.8% GDP growth rate for 2000

Seoul posts 8.8% GDP growth rate for 2000

SEOUL (AFP): South Korea's economy grew 8.8 percent in 2000
despite a marked slowdown in the fourth quarter, the central Bank
of Korea (BoK) said Tuesday.

The increase in Gross Domestic Product (GDP) last year was
down from a rate of 10.9 percent the previous year. Some analysts
said the 2000 GDP growth was slightly lower than expected.

The BoK figures showed a sharp fall in growth from the fourth
quarter, when the GDP grew 4.6 percent year-on-year, down from
9.2 percent year-on-year the previous quarter.

"The economy appears to have hit a peak in the third quarter
and began its downturn in the fourth quarter," BoK Director
General Chung Jung-Ho said.

"But the economy is expected to bounce back from the second
half of this year, if overseas factors do not further
deteriorate," he said.

He said stability had returned to international oil prices and
that the price of semiconductors, South Korea's key exports,
appeared to have hit a bottom.

In its last forecast made in December, the BoK predicted GDP
growth would be 5.3 percent this year.

The information technology industry served as a locomotive for
the economic growth, accounting for 15.3 percent of total GDP in
2000, up from 12.2 percent the previous year.

Exports were largely driving the economy, contributing around
63.4 percent to the economic growth, while domestic consumption
accounted for 36.6 percent of the expansion.

The per-capita Gross National Income, an average income for
every South Korean, grew 12.6 percent to $9,628.

Samsung Economic Research Institute chief researcher Hwang In-
Sung said first quarter GDP this year was expected to post a 2.5
percent year-on-year growth.

"The economy seems to be approaching a bottom... I expect a
turning point as early as in the second quarter or in the second
half," he said, citing signs of improvement in consumer and
business confidence.

For the whole of 2001 the Samsung institute expects a 4.5
percent growth in GDP, below the BoK's forecast of 5.3 percent.

Hwang said a difficult time would lie ahead for exports
because of a slowdown in the U.S. economy, a weak Japanese yen
and volatile foreign exchange rates.

Daishin Economic Research Institute senior economist Kwon
Hyeuk-Boo drew a gloomier picture of the year's economic
prospects.

"Our earlier GDP growth forecast for this year was around 4.0
percent but recent developments in the US and Japanese economies
may bring it to a lower level than that," he said.

Kwon said the first quarter was expected to grow 3.0 percent
year-on-year this year or even less because of a slowdown in
investment and consumption.

"If the US economy fails to achieve a soft landing, the
recovery in South Korea may not come until next year," he said,
noting that the United States is the biggest buyer of South
Korea's IT exports.

The economic doldrums in Japan and the weak yen may also be a
drag on South Korea's economic rebound. "A weaker yen seems
inevitable for a while and it is not good news for local
exports," he said.