Brighter Economic Prospects
Brighter Economic Prospects
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  • 승인 2005.12.01 12:01
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Landmark trade figure lifts Korea to No.12 trading nation Despite the three-year economic stagnation, the nation is set for a new milestone achievement in global trade this year as the trade volume is to exceed $500 billion, making it the 12th largest trader in the world. More specifically, the figure for the year is expected to reach $545 billion, with $285 billion in exports and $260 billion in imports, according to the Ministry of Commerce, Industry and Energy (MOCIE). It took 42 years for the nation to break through the $500 billion mark in international trade from a mere $500 million in 1963. With the nation's lack of natural resources, trade has been the main driving force behind economic development, as demonstrated by its share of the gross domestic product accounting for 70 percent last year. MOCIE forecast that the nation's global trade would double to $1 trillion in 10 years, compared with the three to 14 years it took the United States, Germany, China and Japan to reach the amount after the $500 billion achievement. In the meantime, the Organization for Economic Cooperation and Development (OECD) revised its economic growth outlook for Korea for next year to 5.1 percent from its earlier projection of 4.9 percent. The club of 30 wealthy nations, based in Paris, raised Korea's economic growth forecast, assuming that Korea would see a recovery in private consumption and a pickup in exports whose increase has slowed due to steep oil prices. Without a doubt, the OECD's upward adjustment of the nation's economic outlook is encouraging news for the government as it comes when the general public is feeling the pinch in terms of livelihood. As the OECD suggested, there are signs that domestic consumption is recovering from its protracted slump, following the collapse of the household credit bubble in 2002. However, it is too early to say a recovery in local consumption is around the corner because there is the possibility that it will further plunge due to increased household debt and a setback in the construction sector entailed by the government's harsh steps to root out real estate speculation. The turnaround in domestic consumption is generally considered to be realized by encouraging enterprises, especially family-owned conglomerates, to expand their facility investments and pursue other projects. Against this backdrop, the government ought to lift, or drastically ease the various restrictions on chaebols' corporate activities as early as possible. Rapid expansion of global trade will not be appreciated by the general public as long as the economy stays in the doldrums.

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