Bloomberg’s William Pesek compliment’s Korean impressive recent growth, but worries that Asia’s rapid recovery might create its own bubble:
Hats off to officials in Seoul.
South Korea’s ability to expand at the fastest pace in almost six years is some of the best news Asia has had in a long while. It’s a sign that even with the $14 trillion U.S. economy in chaos, Asia is beating the odds and holding its own.
For now, at least. The region can’t be complacent for two reasons. One, increased spending and low interest rates are fine for the moment, yet they don’t replace a return of global demand. Two, loose policies may be doing more to fuel bubbles that merely provide the illusion of economic recovery, leaving Asia even more vulnerable to further problems in markets.
Interesting piece, so read the rest on your own.
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It’s easy question to answer. Korea is recovering faster because they make substitute products that are cheaper than Japanese, German and even American automotive and consumer electronic products. That’s a good thing in a recession.
God bless the weak won.
Actually, I think that the US economy is not in chaos, but recovering quickly. And I think the Korean economy is also recovering quickly because its so tightly tied to the US economy. I don’t have any hard numbers to back all this up, but I’m sure someone can come up with something in the ensuing argument.
the U.S. economy continues to go sideways at best. the unemployment is atrocious and compounding how bad things will continue to be for at least a couple to few years. we have yet to see if there isn’t another significant drop in the overall macroeconomic data and markets throughout the next year.
korea has done fairly well, but they’re far from being out of danger. emerging markets got thumped pretty well with their higher betas. easy to see a lot of growth when you’re looking up from deeper bottoms. we’ll see how long the government stimulus effects last once things work their way out. and it has to be kept in mind that korea is benefiting by china’s stimulus moves as well. i suppose a case could be made for higher rates of domestic consumption in the PRC further strengthening the korean economy in the long run.
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