Major investment banks forecast negative growth for S Korean economy

Special Report:Global Financial Crisis

SEOUL, Feb. 5 (Chinese media) -- Major global investment banks predict that South

Korea will mark negative growth this year, in contrast to their earlier positive

forecasts, South Korean government data showed Thursday.

The data compiled by the Korea Center for International Finance showed that

10 major investment banks forecast a contraction of South Korean economy by 2.3

percent on average for this year, down from their earlier projection of 0.8

percent expansion at the end of December.

BNP Paribas was with the grimmest forecast, a 4.5 percent contraction.

Deutsche Bank and UBS predicted that the economy will shrink by 4 percent and 3

percent, respectively. All the other banks also forecasted minus growth.

Earlier on Tuesday, the International Monetary Fund also made a pessimistic

projection of a 4 percent contraction on South Korea's economy, citing weakened

domestic demand and exports.

Overseas shipments dropped 32.8 percent in January from a year earlier,

according to government data.

The government and the central bank are taking measures to revitalize the

declining economy, which include tax cuts, fiscal spending expansion and

interest rate reductions, Yonhap reported.

The Ministry of Strategy and Finance announced last month that it plans to

invest 50 trillion won, or 37 billion U.S. dollars, in so-called "Green New

Deal" projects over the next for years, in order to promote job creation, Yonhap

added.