By Lee Hyo-sik
Staff Reporter
Korea, an outward-oriented economy, has been taking a blunt hit from rapidly faltering economic activities across the globe following the outbreak of the credit crisis in the United States last summer.
The world economy is widely expected to shrink this year for the first time since the end of World War II, with the United States and other advanced nations posting steep declines.
However, the world's 13th largest economy has shown signs of a turnaround in recent weeks, with the International Monetary Fund (IMF) and multinational investment banks projecting that the country will lead the pack in the global race to a meaningful rebound.
JPMorgan Chase said in a recent report that Korea's outbound shipments are recovering at a much faster pace than those of other developing economies, calling it a marked signal for an upturn in global economic activity. The U.S. bank also called Taiwan one of two economies that will take the lead in a worldwide campaign to get the economy back on track.
According to the National Statistical Office (NSO), industrial output production gained 1.3 percent in January from the previous month, the first monthly gain in four months. The number of bankrupt firms decreased to 230 in February from 262 a month before, the second consecutive month of declines, according to the Bank of Korea (BOK).
Exports shrank 18.3 percent in February, an improvement from January's 33.8 percent contraction, while the current account posted a $3.5 billion surplus. The trade surplus in March is forecast to reach $4 billion, which will help improve liquidity conditions here and stabilize the financial market.
``South Korea and Taiwan act as bellwethers for emerging economies. Despite rapidly falling global demand and cross-border trade volumes, the two countries have sent hopeful signals for a global economic recovery,'' JPMorgan said.
It then said a faster-than-expected recovery in exports of the two economies points to an improvement in China's domestic demand. ``If the trend continues and spreads to other developing countries, it indicates the entire global economy is about to turn around.''
Additionally, the IMF said Thursday that Korea and other emerging economies will perform much better, compared to developed ones, this year and beyond. It projected that the U.S. economy will contract 2.6 percent in 2009 from a year earlier, with Japan and the euro zone shrinking 5.8 percent and 3.2 percent.
But emerging economies will see their gross domestic product (GDP) expand by an average 1.5 to 2.5 percent this year. As a whole, the global economy is expected to shrink by 0.5 to 1 percent.
Thanks to stimulus packages and other measures introduced by governments around the world to prop up the sagging economy, the Washington-based organization projected that global GDP will expand at a faster rate in 2010.
Japan will continue to contract next year, by 0.2 percent year-on-year, while the U.S. and euro zone economies grow by 0.2 percent and 0.1 percent. Emerging economies will post between 3.5 percent to 4.5 percent growth next year.