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Economy Planning
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2001-07-22 08:25:00-04
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South Korean, Taiwanese Outlook Dimmed
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Think tank lowers South Koreran economic forecast, export slump cited
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On Friday, the state-run Korea Development Institute (KDI) lowered its economic expansion to 4 percent from 4.3 percent. The drop0ff is a result of the declining state of exports and is well below the country's growth rate of 8.8 percent in 2000. In Taiwan, the leading think tank lowered its outlook on the island's economy from 5.2 percent to 2.4 percent. In South Korea, prices for the kind of chip that South Korean companies specialize in have collapsed. The price for dynamic random access memory chips has dropped 90 percent this year to $1
from $9. Samsung, the world's largest memory chip maker and Hynix Semiconductor, the world's number 3 producer, both specize in DRAM chips. Both firms have indicated that they are cutting spending on plant expansion. The two companies reported second quarter results that showed major declines. South Korea's chip exports fell 60 percent in July . South Korea is still laboring under a huge debt load from the 1997 Asian financial crisis. The South Korean government is still attepting to figure out a resolution to unload its stakes in the country's banks, many of which it took over after the crisis. The KDI says the government didn't do enough to help the economy in the first half of the year, indicating that it should inject more money into the economy for the rest of 2000.
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