U.S. hard landing to bring less than 4% growth in Korea: Jin

Deputy Prime Minister Jin Nyum forecast Wednesday that the Korean economy would grow by less than four percent this year if the American economy makes a hard landing.

At a breakfast meeting with the Korea Management Association, Jin, who concurrently serves as the finance and economy minister, said he has talked with many experts, including the Bank of Korea governor and the chairman of the Financial Supervisory Commission, about global economic prospects in the U.S. and Japan.

They predicted that the U.S. economy would soon make a hard landing and that the economic outlook for this year was gloomier than forecast three months ago. "The economic situation has worsened compared to three months ago. The nation needs to turn its eyes to the Chinese and South American markets because national economic growth will probably dip to below 4 percent if the U.S. economy grows less than 2 percent," he said.

Jin dismissed concerns that an abrupt ban on certain settlement practices that some companies use to improve their book value could cause great confusion. He said that inspections at major companies found only 10 to 12 percent of companies were engaged in such fraudulent practices. The minister said that criminal accounting practices should be removed but added that the ministry would take gradual measures to compensate for losses companies may suffer as a result of sudden changes in the accounting system.

Choi Young-Hae moneychoi@donga.com