Ministry: S. Korean economy faces hurdles

May 18, 2009 at 10:25 PM
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SEOUL, May 18 (UPI) -- The South Korean economy, despite stimulus measures, remains burdened by declining exports and domestic demand, the finance ministry said Tuesday.

The ministry said the stimulus measures helped prevent a sharp economic downturn but said it would not be possible to predict if the recovery can be sustained because of other conditions, Yonhap news agency reported.

The country prevented a technical recession after the gross domestic product rose 0.1 percent in the first quarter of this year from the fourth quarter of last year when the GDP plunged 5.1 percent, the ministry said.

"On the back of stabilizing financial markets and the government's expansionary macroeconomic measures, it seems that a sharp economic downturn is abating," the ministry said. "Still, the pace of recovery is slow and uncertain outside conditions make it tough to predict that recovery will continue."

The Yonhap report quoted the ministry that there have been improvements in some economic indicators and the financial markets. However, it said employment, domestic demand and exports continued to fall.

"The government needs to stick to its policy efforts to make economic recovery really materialize," it said.

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