WORLD NEWS TOMORROW – KOREA -The domestic economy is expected to grow in the coming months despite negative external market conditions caused by prolonged euro zone debt problems and slowing growth in major trading partners, data showed yesterday.According to the data by the Organization for Economic Cooperation and Development, the composite leading indicator (CLI) of economic activity for Korea inched up to 100.6 in June, from 100.3 tallied in the previous month.
This marked the 11th consecutive month that the index has risen on-month. The index also has remained above 100 since April.The CLI gauges how the economy will fare in the next four to six months by measuring industrial output, GDP, and housing and financial market conditions. A reading above 100 means the economy is expected to expand.Experts say the outlook may not be as bright as the indicator suggests as the euro zone debt problems and possible global slowdown are putting a drag on the country’s export-oriented economy.
According to the OECD data, the CLI for China stood at 99.3 in June, marking the seventh straight month that the index had remained below 100. The index for the euro zone countries was 99.4 in June.Korea’s economy has been showing signs of losing steam recently.In July, exports fell 8.8 percent on-year, and industrial output growth slowed to 1.6 percent in June, after racking up a 2.9 percent gain one year earlier.
The central bank announced earlier that the economy grew 0.4 percent on-quarter in the April-June period, slowing from a 0.9 percent gain in Q1.This is the slowest growth since a 0.3 percent expansion in the fourth quarter of 2011. The economy grew 2.4 percent from a year earlier.Finance Minister Bahk Jae-wan recently expressed concerns that economic growth could drop to the 2 percent range for this year, lower than the government’s growth outlook of 3.3 percent.