Morgan & Stanley Predicts Recovery of Korean Economy

Morgan & Stanley, the U.S.-based investment bank, predicted that Korea and Thailand's economy will hit the lowest point of their economic downturns in several months and then start to recover. However, they indicated that the recovery will be very slow. The main factor for this is renewed consumption stemming from the thawing of savings which were frozen by peoply as reserves for hard times.
According to the company, additional investment into Asian countries except for Japan is expected. It analyzed that the usable foreign reserve of Korea was approaching 75 billion dollars and the trade surplus was predicted to be more than 38 billion dollars this year and to be 20 billion dollars in 1999. It added that the trade surplus, low price index, and high unemployment rate will continue for the time being. As a result, the value of the won against the dollar will drop to 1,200 won at the end of this year and to 1,150 won next year.