South Korea's economy may shrink in the first and second quarters of next year, affected by a global economic slowdown, President Lee Myung Bak said, Bloomberg reported.
"We see the first quarter and the second quarter to be the bottom," Lee said at a meeting at the presidential house in Seoul today, according to his office Web site.
"The world economy is difficult and South Korea is heavily dependent on the external side. Even though we may post positive annual growth, we're in danger of posting negative growth in the first and second quarters."
Lee's comments come after he said on Dec. 25 the government will ensure economic growth next year. The economy will expand 2 percent, the slowest pace in 11 years, in 2009 as the deepening global recession cools demand at home and abroad, the central bank said on Dec. 12.
Exports of goods will rise 1.3 percent, slowing from an estimated 3.6 percent gain in 2008, the central bank forecast in its 2009 outlook. The nation targets exports of $450 billion next year, the Minister of Knowledge Economy said yesterday, trimming its November forecast of $500 billion.
"There's hardly any country posting economic growth from the fourth quarter to the first quarter," Lee said today. "I am doing my best to overcome this difficulty. There is an end to this agony; it won't last 10 or 20 years."
South Korea is also pumping funds into banks, cutting taxes and boosting public spending to limit the fallout from the global credit crisis, which sent the Korean won down more than 28 percent and the stock index tumbling 41 percent this year. The central bank most recently cut its benchmark interest rate by 1 percentage point to a record low 3 percent on Dec. 11.
