South Korea's economy is expected to recover at the fastest pace among the world's major countries as it shows signs of stabilization after output grew and foreign liquidity expanded, a report showed Monday.
The report by the Organization for Economic Cooperation and Development (OECD) said the composite leading indicator (CLI) for South Korea increased to 94.5 in February, up 1.6 points from 92.9 a month earlier, according to Yonhap News.
The CLI is a composite economic indicator that gauges how the economy will fare six months ahead by measuring industrial output, housing and financial market conditions, and the gross domestic product of each nation. A reading below 100 means the economy will continue to shrink.
South Korea posted the steepest improvement among the 30 OECD member nations in the index, the report showed. Mexico saw its February CLI rise 0.5 points, followed by Italy, Turkey, Finland and New Zealand.
The OECD average stood at 92, down 0.7 points from a month earlier, according to the report, raising hopes that South Korea, Asia's fourth-largest economy, will rebound at the fastest clip among major global economies.
Buffeted by a protracted global downturn, the South Korean economy is feared to contract 2.4 percent this year, the first minus growth in more than a decade, according to the latest prediction by the central bank.
However, as the government rushes to unveil a series of stimulus measures, including a 28.9 trillion won extra budget, indicators are showing some signs of stabilization. Industrial output expanded in February from a month earlier and financial markets are regaining composure as foreign investors are purchasing local shares and bonds.
On April 9, the government announced that it sold $3 billion worth of dollar-denominated state bonds, quelling concerns over a liquidity crunch in the world's 13th biggest economy
Gross domestic product also rose 0.2 percent in the first quarter from three months earlier after plunging 5.1 percent in the last quarter of 2008, the central bank said.
"The OECD report shows that our economy will likely recover at the fastest pace among its member countries, a forecast evidenced by some improving economic indicators including industrial output and expanded liquidity," a finance ministry official said.