Korean Economy Unlikely to Face Renewed Economic Crisis, IMF Says
December 6, 2000 (SEOUL) -- Despite recent fears, Korea is not likely to fall into another economic crisis, said David Coe, the IMF senior representative in Seoul.
Coe said on Dec. 4 at a press conference that Korea's economic crisis in 1997 was based on a crisis regarding the trust factor between Korea and other countries. In response to questions regarding the possibility of a new economic crisis, Coe stated, worries of another economic crisis are overrated.
"I know that some local corporations have weak cash flows and a number of companies lack profitability," Coe said. However, restructuring in the corporate and financial sectors should pick up its pace over the next few years, he noted.
Concerning the interest rate policy, Coe stated, the Korean government should not implement policies to lower interest rates in a move to revive the economy.
Coe also commented on the recent swoon of Korean capital markets and economic prospects, saying short-term prospects regarding the Korean economy are bleak, mainly due to external factors such as unstable international oil prices and a falling NYSE. These factors also likely will cause a fall in economic growth during the first six months of 2001. However, Coe added that the economy will rebound during the latter half of 2001.
Local corporations rely too heavily on the banking sector, Coe said, and emphasized that companies should be able to bring in direct financing through the issuance of bonds and stocks.
(Maeil Business Newspaper, Korea) |
