South Korea is not immune to the global events that have rocked economies and markets this year, but Asia’s fourth-largest economy is resilient, economists say, and far less vulnerable to the kind of shocks that triggered turmoil for the nation during the Asian financial crisis in 1997 .
Since 2000, South Korea has grown far faster than other advanced economies. This is because companies such as Samsung Electronics and Hyundai Motor have gained market share and global prominence, and the government has bolstered its foreign exchange reserves, strengthened the financial system, and boosted government spending at home.
As a result, despite the South Korean economy’s heavy reliance on exports, it can weather the double-whammy of the European sovereign debt crisis and slower growth in China, many economists say.
“(Korea) has a lot of fiscal space to deal with challenges that could arise from the European sovereign banking crisis to stimulate economy, keep growth up, … probably more fiscal space than most other advanced countries,” says Tom Byrne, senior vice president at Moody’s Investors Service.Page 1 of 6 | Next Page