Eurozone debt woes weighing down Korea’s economic growth: report

Korea’s economic conditions continue to improve modestly, but eurozone debt problems and slowdowns in major countries are still fueling uncertainties for its export-driven growth, the finance ministry said Thursday.

In its monthly “green book” report, the ministry said that the government has to brace for a persistent and prolonged crisis down the road, underlining the need to closely monitor market conditions at home and abroad.

“External market situations remain cloudy as worries over the eurozone fiscal crisis and slowdowns in major economies such as the U.S. continue,” the report said.

“We have to closely monitor trends at home and abroad while bracing for a possible long-term crisis as well as beefing up policy efforts to reinvigorate the economy.”

South Korea’s economy, heavily dependent on trade, has been affected by shrinking demand for its goods.

The government predicted the country’s exports will grow 3.5 percent this year, far lower than a 19-percent advance registered a year earlier.

Citing strong headwinds from the eurozone debt problems and faltering economies in major countries, the ministry recently revised down its 2012 growth projection from 3.7 percent to 3.3 percent.

The green book report, which analyzes the latest economic trends, still pointed to improving economic indicators such as easing inflation and expanded job creation.

Korea’s consumer prices rose 2.2 percent in June from a year earlier, marking the fourth month in a row that inflation stood in the 2 percent range. The economy also added 472,000 jobs in May compared with a year earlier. 

(Yonhap News)