By Kim Jae-kyoung
Staff reporter
Economic policymakers should be extra careful in picking the right moment for implementing an exit strategy as any premature action could derail economic recovery, according to a global consulting company, Thursday.
In its report titled "In the Eye of the Strom" based on a survey of 440 executives in seven developed countries, the Boston Consulting Group said that policymakers should focus on the long haul while ignoring short-term indicators.
"The G-20 is urging members to develop credible strategies for reducing stimulus spending and allowing ultra-low interest rates to rise to more normal levels," the consulting firm said in the report.
"These exit plans pose considerable risks to the nascent recovery. And sovereign debt crisis has taken the glass off some of the G-20's optimism," it added.
According to the survey, 52 percent of the respondents forecast that the economic recovery will be L-shaped, while only 10 percent expect a V-shaped recovery. More than half of them expect corporate profitability to deteriorate down the road.
The firm said that the business leaders' gloomy view suggests that policymakers should not be influenced by individual indicators.
"Business leaders tend to be more pessimistic than economic policymakers in job creation and investment. Korea, which relies heavily on exports, should realize that current booming exports will not last for a considerable period," a BCG Seoul office senior consultant said.
"Governments and management teams need to take a long-term perspective, planning for their economies and their businesses in a prudent and more farsighted way," it said.
The survey also shows that 78 percent of them expect more trade protectionism, up from 57 percent a year ago, while 73 percent expect a rebalancing of global trade, up from 56 percent.