By Ahmed Mukhtar Naqshbandi
ISLAMABAD/SEOUL: South Korea has promised strong support for exporters after the country posted its first economic contraction in over two years due to tumbling exports, with a hovering recession.
According to Reuters, playing down the economic slowdown as part of an international trend and saying a return to growth in the current quarter “is possible,” Finance Minister Choo Kyung-ho pledged prompt support measures for exporters, such as tax breaks and administrative help.
Economy Shrinks
South Korean central bank estimates showed gross domestic product shrank by 0.4 per cent in the October-December period from the previous quarter. Economists in a Reuters poll had expected a 0.3 percent fall.
“The government could focus policy resources on reactivating exports and investment, such as pushing ahead with deregulation efforts and offering tax and financial support,” Choo said at a meeting of officials.
Leading the first GDP decrease since the second quarter of 2020 were losses of 5.8 percent in exports and 0.4 percent in private consumption. In contrast, according to the central bank’s estimates, government spending posted a sharp 3.2 per cent rise, which was seasonally adjusted.
There is a sign of continued weakness in the first quarter. The slump in the property market has deepened, and exports per working day were 8.8% lower from January 1-20 than a year earlier.
