By Kim Jae-kyoung
Staff Reporter
Only a couple of month ago, foreign media, including the Financial Times and The Economist, churned out negative reports on the Korean economy, citing its large external debt and insufficient foreign exchange reserves.
They claimed that Korea was most susceptible to a currency crisis, which sent a shudder through the local financial market and raised serious doubts about the solvency of Asia's fourth largest economy.
Now, with a stabilization trend in industrial output and a growing surplus in trade accounts, they're telling a completely different story, having produced a series of optimistic reports, supporting a glimmer of optimism that the Korean economy will soon bottom out.
In an article Sunday, Bloomberg columnist William Pesek said, ``If you're looking for signs the world economy is bottoming out, South Korea could be the place. Amid such risks, hints that the Bank of Korea's most aggressive round of interest rate cuts in a decade is coming to an end are a rare ray of sunlight. Among developed economies, Korea's was arguably the first sent into freefall by the global crisis.''
``Signs that Korea's deepest contraction in more than a decade is abating could be a harbinger of a more stable world economy,'' he added.
The nation's trade surplus reached a record high of $4.6 billion in March, the largest monthly surplus since the $3.8 billion of April 1998. Industrial production only fell 10.3 percent in February year-on-year, a turnaround from January's 25 percent drop.
In its weekend edition, the Financial Times also cited Korea's economic performance as a harbinger of a slowing of the global economic downturn, noting that its economy squeezed out 0.2 percent sequential growth in the first quarter after contracting rapidly in late 2008.
The daily pointed out that together with improvement in China's March shipment, Korean growth added to other scattered signs around the world that the pace of decline is slowing ― raising hopes that the world economy will turn the corner later this year.
Foreign media's growing optimism came a few days after Seoul sold $3 billion of dollar-denominated bonds overseas to calm market jitters over a liquidity shortage.
``The worst of times for Korea's external-payments stress may be over. While this is no guarantee of economic health, it is a passport for the long journey toward recovery,'' Standard Chartered said in its latest report.
``Challenges remain, including noise from North Korea and protectionist threats from the West, but more encouraging signs are emerging,'' it added.