[EDITORIALS]No takeoff, bad landing?The national economy is sinking again. The economy, which showed brief signs of recovery earlier this year, headed down beginning in the second quarter, and the government forecasts that the downward momentum of economic growth will pick up in the second half. Taking into account that both consumption sentiment and investment sentiment are sour, the Bank of Korea yesterday revised its second-half economic growth projection downward, from 4.6 percent to 4.4 percent.
The government and the central bank still assert that annual growth of 5 percent is likely, even considering the worsened performance in the second half. They say the economic turnaround is just weaker and that the economy has not entered a recession yet.
But private economic institutes are already predicting that 5-percent growth this year is out of the question.
Many private institutes have come up with projections that the growth rate in the remaining six months of the year will not even reach 4 percent. It appears likely that other private economic institutes will also lower their second-half estimates.
What is more ominous is that the majority of executives of Korea’s leading companies project that the nation will not meet the growth target of 5 percent.
A survey by the JoongAng Ilbo of Korea’s biggest 100 enterprises showed that 93 percent of the 87 managers who returned the survey said they expected that growth target to be missed.
A prediction is just a prediction, but the poll results clearly show that it is high time for the administration to embark on some serious research into the economy. The government is not in a position to play with words, saying that “economic indexes show that the revitalization will continue” or “the economy is fine but it is just that public welfare is sagging.”
Some critics raise the possibility of a hard landing of the economy during the the second half of this year. That means the economy may not turn up; it may not recover.
The problem is that the economy has never been invigorated since this administration started. Its major interest has been in curbing real estate speculation over the past three years.
It is deplorable that Koreans should worry about a landing when they haven’t seen a takeoff. The new finance minister, who will be inheriting this sagging economy, will have a tough job on his hands; we hope he doesn’t just promise to continue existing policies.