Korean Job Discussion Forums

[Alyssa]

I had a friend send me this today, she is korean and in a panic. This is from Moodys, done in a korean paper. Is korea in the state of panic, or are they trying to ignore it, as usual?




http://www.koreatimes.co.kr/www/news/biz/2008/11/123_34428.html

Moody�s: Economy to Grow 2% in 2009

By Yoon Ja-young
Staff Reporter

Korea's economic growth will fall to around 2 percent next year amid a slowdown of exports and the domestic economy losing steam, a sovereign analyst at Moody's said Thursday, adding he sees no source of growth.

``Korea's economic growth rate is mostly driven by trade. Exports will suffer from the global trade slowdown in the United States, Europe and Japan, and even China,'' said Thomas Byrne, senior vice president and regional credit officer for Asia & the Middle East at Moody's.

``I don't see any source of growth in the Korean economy except for the fiscal stimulus,'' he said, pointing out that with exports making little contribution to the economy next year, there seems no domestic sector good enough to sustain the economy. ``The chaebol sector, perhaps they could pick up, but chaebol haven't been investing much. They are not going to be recruiting more people either,'' he said.

He estimated the economy to grow around 2 percent in 2009, far lower than the Korea Development Institute's (KDI) 3.3 percent projection.

Moody's, however, doesn't have immediate plans to downgrade its outlook on the sovereign rating of Korea, Byrne said, citing ample foreign exchange reserves and the fiscal soundness of the government. Moody's holds an A2 rating with a stable outlook on Korea. The country, however, was shocked when Fitch Ratings, another rating agency, lowered its outlook from stable to negative earlier this week.

``Every country will have a downturn. The severity will be determined by to what extent the banks are exposed to the global financial system,'' he said, adding ``Countries that are very open, and have external trade for a large share of GDP will be exposed.''

``We won't have any across-the-board downgrades. We won't downgrade every country in a certain region. Instead we will take a case-by-case approach,'' Byrne said, adding that Asian countries, which went through similar troubles in 1997, have prepared themselves better for the crisis in general, mainly through the accumulation of currency reserves.

``Korea, going into 2008, had an adequate level of foreign exchange reserves even though short-term debt is rising. The budget is in good shape as is government finance.''

However, he said that Korean banks' high loan to deposit (LTD) ratio introduces vulnerability.

Regarding the recently rising tension with North Korea, he said the latest threat by the North wouldn't affect the ratings. ``This latest threat by North Korea sounds very bizarre to me. It will hurt North Korea more than anything else,'' he said, pointing out that North Korea earns foreign exchange through the Gaeseong Industrial Complex and tour programs to Mt. Kumgang.

He said Korea's strong alliance with the United States and cooperation between regional powers such as the United States and China will help deter military action on the peninsula. Even if North Korean leader Kim Jong-il dies, he expects there are contingency plans to restore stability.

[Jeff's Cigarettes]

If it ain't written in the bible, it ain't the truth. Predictions are like buttholes...everyone has one.

[seosan08]

2009 is going to be a bad year for EVERYONE!

[jkelly80]

2 percent annual GDP growth is a catastrophe? The US had that for a couple of years too, before this whole housing fiasco. Nothing to freak out about.

[itaewonguy]

[crescent]

^^
Wages won't change, but bankruptcies and salary non-paymnent/cheating will increase if the economy gets worse.

[Alyssa]

[Beeyee]

[seosan08]

[Bigfeet]

Like someone said, 2% growth is bad if exports is your lifeblood. College kids defaulting on their school loans have been shooting up the last few years. This recession will make it sky-rocket. Consumers can't spend their way out of the recession because they're already heavily in debt. Plus, there's a housing bubble in Seoul.

[cruisemonkey]

[itaewonguy]

[seosan08]

[crosbystillsstash]

The Korean government needs to educate these foreign organizations, then they can get a better understanding of the Korean economy and stop being so negative

[Bigfeet]

Bus prices already went up where I live. from 1500 to 2000 and from 3600 to 4000.