Events article (Humanity)

The International Monetary Fund said yesterday that it expects the Korean economy to be the worst performer in the G20 in 2009 because of the country`s sensitivity to export demand.

In its latest outlook for Asia and global economic developments, the IMF said Korea would post 4.2 percent growth in 2010, when the global economy is expected to start recovering gradually.

It said the average of Korea`s GDP for 2009 would be 4 percent lower than the 2008 average, due mainly to slow recovery from a 5.6 percent contraction at the end of 2008. The IMF previously projected 2 percent higher GDP in 2009.

The revised outlook for Korea is the worst among its forecasts for G20 nations. The IMF said the euro-zone economy would be worth 2 percent less and Asia`s newly industrializing economies, 3.9 percent less.

For Korea, 4 percent lower GDP would be the worst figure since the 6.9 percent annualized reduction in 1998 when the nation was hit by the Asian financial meltdown.

The IMF forecast that the global economy is expected to grow by 0.5 percent in 2009, the slowest pace since WWII.

It is inevitable that export-dependent Korea, as well as Asia`s newly industrializing economies, will suffer drastic decline in exports due to falling global demand, the IMF said.

Korea`s exports in January plunged by a record 32.8 percent from a year ago to $21.7 billion, making the trade balance swing to a deficit of $2.97 billion.

By quarterly growth, the economy will shrink 0.8 percent in the first quarter, hit a bottom in the second quarter with a 0 percent growth, and start to recover with a 0.7 percent growth in the third quarter and 1.1 percent growth in the fourth quarter, it added.

"The (prediction of) a 4 percent contraction is quite shocking, but we have to pay attention to the possibility of the world`s fastest recovery next year," Vice Finance Minister Hur Kyung-wook told reporters in Gwacheon.

"The government will make all-out effort including fiscal spending and liquidity injection to boost the domestic demand."

The government has allocated about 140 trillion won ($102 billion), or 15 percent of GDP, in liquidity injections, tax cuts and stimulus packages. The Bank of Korea slashed the interest rate to a record low of 2.5 percent in January.

Not only the IMF but an increasing number of think tanks and investment banks have sharply revised down outlooks for Korea to negative growth averages.

UBS predicted a 3 percent contraction and Moody`s Investors Service suggested a 2 percent contraction. Standard & Poor`s said the economy would grow zero percent this year.

why: this is really serious problem in the world now.
who: all of us in the world
what: IMF problem
Where: all over in the world
How: The economy is causing a lot of problems, we need a clue for this.
This is really important, because it's a serious problem in the world now.
World should worry about this huge problem.
This is a serious problem for now.
We have to know how serious is this and make a solve, critical thinking !!