Wednesday, March 24, 2004
DESPITE THE POLITICAL TURMOIL, THE SOUTH KOREAN ECONOMY APPEARS TO BE IMPROVING
The South Korean economy expanded by 2.7 percent in the fourth quarter, its fastest pace in almost two years, as exports remained strong, the central bank said on Tuesday. The report spurred hopes that the economy, which has been hindered by slow consumer spending, was finally on the mend.Political troubles, widespread credit card debt, and global economic changes (rising oil prices etc.) all threaten this still fragile recovery. The ROK government is taking measures designed deal with some of these problems and to stimulate consumer spending:
To stimulate consumer spending, the government has taken various steps, ranging from bailing out credit card defaulters to creating jobs.. Would a $250 discount on a car make the average consumer more likely to buy one?
South Korea also said it would cut taxes on automobiles and household appliances until the end of this year, reducing the price of a midsize car by around $250.
Early this year, the government said it would start a "bad bank'' to help credit card delinquents. Defaulters who make a payment of 3 percent of their debt balance will be allowed to repay the remaining debt over eight years.
South Korea has also embarked on a drive to create more jobs. The government is pushing for laws that would allow companies a tax break of around $1,000 for every person they hire over the next three years.