Need to tighten guard against global economic risks

FKI Seminar on world economic risks for 2nd half

FKI held a seminar to survey global economic risks for the 2nd half at its Grand Conference Hall in Yeouido on June 27. Analysts predicted the risks of the global economy will be up in the second half due to deceleration of the growth rates in emerging economies which had acted as engines for the global economy, and to disquieting factors in the international financial market.

Speaking on 'Future changes in domestic and international financial markets and their risks,' Min Geun Bae, Senior Research Fellow of LG Economic Research Institute (LGERI), forecast that since the implementation of the U.S. exit strategy would mark a great turn in the international financial market, and cause more worries, we cannot rule out the possibility of foreign exchange crises in Southeast Asia and in Latin America. A drop in demand would end up being a bearish raw material market, putting us on alert to fluctuations in the days to come, noted Tae Won Yoo, head of a team at Samsung Futures.

Meanwhile, Director Chang Kyu Lee of the Center for Emerging Economies Research, the Korea Institute for International Economic Policy (KIEP), viewed that economic growth in emerging economies, including India and Brazil, which have been slower for the last two years, would remain low. Wi Dae Kim, head of the European team at the Korean Center for International Finance (KCIF), analyzed the business downturn is likely to drag on because of the shrinkage of manufacturing and income growth, and deleveraging in the region, forecasting that yet another sovereign debt crisis may come to the surface.

In the meantime, according to a background survey of the participants conducted by FKI, 83.3% of the respondents failed to achieve their goals during the first half; merely 1.7% exceeded their goals.