Institute Says Rebound Is Likely in 6 Months

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Institute Says Rebound Is Likely in 6 Months

The Korea Economic Research Institute, a private think tank, said Monday that economic recovery is about six months away. The institute, a industry lobby group that represents Korea's largest companies, said the economy tends to begin to pick up about two quarters after an upturn in the business survey index, which rose sharply this month.

The business survey index measures companies outlook on conditions six months down the road. At a reading of 100, the number of firms that are optimistic equals the number that are pessimistic. The index figure released by the federation last week was 101, up from 68 in January.

The think tank said its analysis of similar indicators and indices prepared by the Bank of Korea, the Federation of Korean Industries and the Korea Chamber of Commerce & Industry support the contention of a six to eight month interval before an actual economic rebound. Following a string of declines, the federation's index reversed course in July 1992 and December 1997 about two quarters before economic activity bottomed out on each occasion, the institute said.

But the institute also cautioned against blind optimism. "There is still a possibility that the recovery, if it comes at all, may merely be a technical rebound," said a researcher, Kim Chang-bae. "Continued restructuring of the economy is necessary for long-term recovery."


by Kim Si-re

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