Gov't, BOK see low chance of double-dip recession
SEOUL, Aug. 26 (Yonhap) -- Chances are not high that the global economy will slip back into a recession despite economic slowdowns in such major economies as Europe and the United States, the finance ministry here said Friday.
It is still necessary to keep tabs on global market situations as uncertainty remains high, the ministry said in a statement after holding a consultation meeting with the central Bank of Korea (BOK).
The meeting is the second of its kind after both agreed in June to hold policy consultation talks every month. Vice Finance Minister Yim Jong-yong and BOK's senior deputy governor Lee Ju-yeol attended the meeting held in central Seoul.
"The growth pace seems to be slowing down in major economies such as Europe and the U.S., but we shared the view that the chances are not high that the global economy could go through a double-dip recession at this point," the ministry said.
"We also shared the view that the financial market conditions at home and abroad remain relatively stable compared with the global financial crisis back in 2008." The meeting comes as market anxiety intensified after Standard and Poors' earlier this month downgraded the credit ratings on U.S. sovereign debts.
South Korea's financial markets suffered tumultuous trading right after the announcement, with stocks and currency losing significant ground.
Anxiety deepened further after Moody's Investors Service on Wednesday cut its ratings on sovereign debts of Japan, raising worries that the global economy could slip back into a recession after a short-lived rebound.
Slowing price hikes of crude and strong growth in emerging markets along with stepped-up policy coordination among the group of 20 countries will likely help prevent a world-wide crisis down the road, according to the ministry.
The finance ministry and the central bank also said that the recent global turmoil affected the nation's financial markets, but its impact has been limited ! and the overall situation remains relatively stable.
"Volatility increased sharply mostly in stock markets where foreign investment takes up a large part, but the bonds and foreign currency markets remain relative stable," the ministry said.
"We still agree on the need to keep tabs on global financial market situations and policy responses by major economies," it noted. "We will also beef up monitoring on any ripple effect on our financial markets and economy, while taking countermeasures in a preemptive manner." (Yonhap)
It is still necessary to keep tabs on global market situations as uncertainty remains high, the ministry said in a statement after holding a consultation meeting with the central Bank of Korea (BOK).
The meeting is the second of its kind after both agreed in June to hold policy consultation talks every month. Vice Finance Minister Yim Jong-yong and BOK's senior deputy governor Lee Ju-yeol attended the meeting held in central Seoul.
"The growth pace seems to be slowing down in major economies such as Europe and the U.S., but we shared the view that the chances are not high that the global economy could go through a double-dip recession at this point," the ministry said.
"We also shared the view that the financial market conditions at home and abroad remain relatively stable compared with the global financial crisis back in 2008." The meeting comes as market anxiety intensified after Standard and Poors' earlier this month downgraded the credit ratings on U.S. sovereign debts.
South Korea's financial markets suffered tumultuous trading right after the announcement, with stocks and currency losing significant ground.
Anxiety deepened further after Moody's Investors Service on Wednesday cut its ratings on sovereign debts of Japan, raising worries that the global economy could slip back into a recession after a short-lived rebound.
Slowing price hikes of crude and strong growth in emerging markets along with stepped-up policy coordination among the group of 20 countries will likely help prevent a world-wide crisis down the road, according to the ministry.
The finance ministry and the central bank also said that the recent global turmoil affected the nation's financial markets, but its impact has been limited ! and the overall situation remains relatively stable.
"Volatility increased sharply mostly in stock markets where foreign investment takes up a large part, but the bonds and foreign currency markets remain relative stable," the ministry said.
"We still agree on the need to keep tabs on global financial market situations and policy responses by major economies," it noted. "We will also beef up monitoring on any ripple effect on our financial markets and economy, while taking countermeasures in a preemptive manner." (Yonhap)
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