Korea sets recovery pace

14 July 2009

SEOUL: South Korea's economy grew by 2.3% between April and June according to figures from the Bank of Korea. If confirmed by official GDP figures, this would mark the fastest quarterly growth since the fourth quarter of 2003.

Even as stock market investors in Asia-Pacific fret over reports that the US economy is recovering more slowly than hoped, thereby hitting the prospects for Far Eastern exporters in particular, there is a growing volume of evidence that economies in the region are on the way back.

India reported a rapid increase in industrial output in May, rising 2.7% from the previous year, more than double the increase in April.

Chinese exports rose 7.5% between May and June (although this was 21.4% down on the same time last year) to hit $95.4bn (€68.5bn, £59bn). Imports rose 15.6% in the same period.

Even in Japan where high-value exports, particularly cars, have been hit hard by the downturn, the rate of decrease in producer prices reduced to just 0.3% from May to June, allaying fears that the Japanese economy was about to embark on another extended spell of deflation as happened in the 1990s.

In the Philippines exports rose 10% between April and May even though they were down 27% year on year.

Chinese premier Wen Jiabao underlined the fact that the economies in the region were still struggling to regain 2008 levels despite recent improvements in exports and GDP, remarking that "an improvement in the economy does not mean that the difficult period is over."

Data sourced from Financial Times; additional content by WARC staff