2009 Top 10 Economic News
The year 2009 was a milestone for Korea as it was hit hard by the global financial crisis but recovered at the fastest pace among major economies on the back of the government's expansionary policies and stronger-than-expected exports. This is in stark contrast to the U.S. and other advanced economies that continue to remain in a deep slump as they struggle with surging unemployment and plunging private consumption. Asia's fourth-largest economy grew by 3.2 percent in the third quarter from the second quarter, the largest quarterly growth since the first quarter of 2002 when output rose 3.8 percent. It also jumped 0.9 percent from July to September from the same period last year, becoming the only country among the 30 member economies of the Organisation for Economic Cooperation and Development (OECD), which posted year-on-year growth in the third quarter. With faster-than-expected growth, global financial institutions and investment banks rushed to raise Korea's growth outlook. The Paris-based organization said in November that the country's gross domestic product (GDP) would grow by 0.1 percent in 2009, up from its June forecast of a 2.2 percent contraction. The OECD also raised its 2010 growth projection for Korea to 4.4 percent from the previous 3.5 percent. Here at home, the state-run Korea Development Institute said the Korean economy will expand by 0.2 percent this year and 5.5 percent next year, while the government and the BOK puts the 2010 growth projections at 5 percent and 4.6 percent, respectively.
Korea was selected as the host of the fifth G20 Summit, slated for November 2010. It is the first Asian country to host the forum, which aims at setting the goal for global economy. At the third G20 Summit in Pittsburgh last September, the world's 15th largest economy got unanimous support as the host of the fifth summit, which will be held after the fourth in Canada in next June. Unlike G8 comprised of only a few developed countries, G20 nations include major developing countries like China, India, Brazil and Korea, and account for about 85 percent of the global economy. As the host of the forum, Korea is expected to reflect voices from developing nations. It will be the largest international forum held in Korea, with more than 10,000 participants including leaders of more than 25 countries and international organizations expected to come.
Under the former Roh Moo-hyun administration, yellow was the most-popular color as hard-core supporters of the late Roh, who committed suicide earlier this year amid an investigation of a bribery scandal, tended to wear hats and shirts or carry balloons of that color. During the current Lee Myung-bak administration, things have changed. With Lee focusing on environment-friendly businesses, green has become the color of choice. President Lee's love affair with green businesses has sprouted up this year in a full-fledged manner as he began his project of refurbishing Korea's four big rivers. Plus, the government has come up with a myriad of low-carbon, eco-friendly initiatives in 2009, thus boosting ``green'' as a nationwide buzzword despite some lingering debates over whether the projects would really benefit the environment. In particular, the four-river refurbishment project has split the nation's politicians and public into two opposing camps. The main argument is over whether the pluses of the project in environmental protection will outweigh the tens of trillions of won cost over the next few years.
This year was tough for consumers, who've been reeling from job losses, rising food prices and hard-to-get credit. But this doesn't mean they didn't spend at all. Thrifty shoppers began turning to online shopping sites that offer dirt-cheap products that are both practical and economical. The nation's leading Internet shopping malls have collectively posted sales growth of more than 15 percent compared to a year earlier, showing a steeper growth margin than traditional retailers. Some of the items that sold strong throughout this year were old-school products that took people down memory lane. For example, ``makgeolli'' (a traditional, milky alcoholic beverage) and red long johns saw their sales soar to fresh highs.
Korea has taken a giant step toward becoming a more globalized country in 2009 by signing a de facto free trade agreement (FTA) with India in August and initialing the bilateral FTA with European Union in October. Korea and India signed the Comprehensive Economic Partnership Agreement (CEPA), wrapping up three years of negotiations. A CEPA is practically the same as an FTA, but tariffs are reduced in phases. Korean Trade Minister Kim Jong-hoon and his EU counterpart Catherine Ashton inking the bilateral FTA in Belgium. They plan to officially sign the trade pact within the first half of 2010. The EU is Korea's second-largest trading partner after China and its largest foreign investor. Korea is the European Union's eighth-largest trade partner, with bilateral trade reaching $98.4 billion in 2008. Korea plans to make more FTA deals with China, Japan and other countries next year to create an economic block in East Asia.
The Samsung Economic Research Institute last week included flu-related goods among this year's top 10 products. The spread of the new influenza A (H1N1) virus stirred up the local retail industry, putting preventive items against the pandemic and health-related products at the top of this year's most-sold lists for both online and offline stores. Items aimed at flu prevention such as surgical masks and hand sanitizers were the best selling products of the year for Auction, the country's largest online retailer. Growing health concerns led to soaring demand for supplementary food items such as red ginseng and vitamins, making them one of the biggest growths in sales in the country's top department stores. The new influenza was a huge boon to both online and offline retailers, including home shopping firms and Internet malls. According to a report by Lotte Department Store, the two industries grew 19.4 percent and 14.4 percent respectively this year, mainly because of the prevailing disease.