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Korea Outperforms Japan in Economic Growth & More
Date
2013.12.12
Views
1090

According to Yonhap News,

Japan surpassed Korea in the stock market… More clarity on policy by the Japanese government

(SEJONG = Yonhap News) Korea’s economic growth and current balance surplus, led by the Park Geun-hye administration, are likely to outperform Japan’s in 2013.

In the stock market, however, Japan remains superior to Korea.

In its first year under the Park Geun-hye administration, the country’s economy is expected to outperform Japan’s in some macroeconomic indicators including economic growth and current balance surplus, according to the International Monetary Fund (IMF), Bank of Korea (BOK) and Korea Development Institute (KDI).

In its first year under the Park Geun-hye administration, the country’s economy is expected to outperform Japan’s in some macroeconomic indicators including economic growth and current balance surplus, according to the International Monetary Fund (IMF), Bank of Korea (BOK) and Korea Development Institute (KDI).

Japan’s economic growth rate, on the other hand, is expected to record a 0.1 percent increase from 1.9 percent in 2012 to reach its peak this year and then slow down to 1.2 percent in 2014.

The outlook shows that Korea will exceed Japan by 0.8 percent in 2013 and 2.5 percent in 2014 in terms of economic growth.

The year-on-year growth rate of Korea posted 0.8 percent in the first quarter and 1.1 percent in both the second and third quarters of 2013. Japan recorded 1.1 percent in the first quarter and then the figure dropped to 0.9 percent and 0.5 percent in the second and third quarters, respectively.

The current balance surplus of Korea, in particular, is predicted to surpass Japan’s for the first time in history.

Japanese institutes including the Japan Research Institute, United predicted that Japan would record the current balance surplus of USD 60 billion in 2013. The BOK and KDI expected USD 63 billion and USD 69 billion of the current balance surplus, respectively.

As for economic policies, however, Abenomics is said to surpass President Park’s government.

The Japanese government suggested a three-pronged strategy, represented by unlimited quantitative and qualitative monetary easing, to achieve a gross domestic product (GDP) growth rate of three percent and an inflation rate of two percent.

The Korean government, on the other hand, announced the economic stimulus plan as its core value in setting up its economic policy, but the plan was criticized for its ambiguous nature, as it had clashed with issues including economic democracy. A hundred and two stimulus bills are pending in the National Assembly.

As Abenomics has aggressively boosted the country’s economy, the Japanese yen depreciated against the U.S. dollar by 19.9 percent to 102.31 as of the end of November.

The Korean won appreciated against the U.S. dollar by 0.01 percent to 1,061.2 at the end of November.

The IMF forecast that the depreciation of the yen will result in a 4.1 percent increase of the total exports of Japan in terms of volume in 2013. In the last year, the country recorded a deficit of 0.1 percent. The rate of increase of total imports is expected to record 2.3 percent, which is lower than 5.4 percent in 2012.

The estimated rate of increase of the total exports and imports of Korea are 5.7 percent and 4.1 percent, respectively. The increase in imports shows a steeper incline compared to the last year.

In the stock market, Japan’s Nikkei 225, which closed at 10,395.18 in 2012, is up by 50 percent and climbed above the 15,000 mark. The Korea Composite Stock Price Index (KOSPI), on the other hand, fell to 1,980.41 from 1997.05 at the end of 2012.

Japan’s consumer prices turned positive, to 0.2 percent, in June and have risen for five consecutive months to 1.1 percent in October, raising hopes for winning its battle on deflation. The Korean economy recorded zero percent consumer price growth rate for three consecutive months and is experiencing the lowest inflation rate in 14 years.

In addition, Japanese retail sales showed a growing trend with 1.1 percent, 3.0 percent and 2.3 percent between August and October, while Korea recorded 2.5 percent, -1.2 percent and 1.6 percent during the same period.

“We highly praise the cooperation between the Bank of Japan and the Japanese government to lead the country’s economic policies to a clear path,” said Lee Boo-hyung, an analyst at Hyundai Research Institute. “The Korean economy will gain momentum once the pending bills in the National Assembly are passed.”

speed@yna.co.kr, charge@yna.co.kr, clap@yna.co.kr

Copyrights Yonhap News. All Rights Reserved.

Source Text

Source: Yonhap News (Dec. 6, 2013)

** This article was translated from the Korean.
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