‘We’ll hit tar­get de­spite Hyundai, Sam­sung woes’

The Sun (Malaysia) - - SUNBIZ -

SEOUL: South Korea’s eco­nomic growth is still ex­pected to meet the gov­ern­ment’s ex­pec­ta­tions this year, al­though re­cent strikes at Hyundai Motor Co and the dis­con­tin­u­a­tion of Sam­sung Elec­tron­ics Co Ltd’s Galaxy Note 7 sales pose risks, the deputy fi­nance min­is­ter said yes­ter­day.

Lee Chan-woo told a news brief­ing on the econ­omy that Sam­sung Elec­tron­ics’ trou­bles could have a neg­a­tive im­pact on the coun­try’s growth, par­tic­u­larly in the sec­ond half of the year.

“It could have neg­a­tive ef­fects on the econ­omy. Es­pe­cially in Sam­sung’s case, this mi­nus ef­fect may be re­flected in the third and fourth quar­ters,” Lee said, re­fer­ring to Sam­sung’s com­ments last week that it ex­pects to take a roughly US$3 bil­lion (RM12.6 bil­lion) hit to its op­er­at­ing profit over the next two quar­ters.

Lee said re­cent strikes at Hyundai, the coun­try’s largest car­maker, were a big­ger risk. He at­trib­uted half of the de­cline in the coun­try’s August in­dus­trial out­put to the strikes, which started in the sum­mer and have since ended.

“But our econ­omy is not just Sam­sung and Hyundai. These losses can be made up through con­sump­tion and in­vest­ment.”

The deputy min­is­ter said growth this year would com­fort­ably meet the gov­ern­ment’s fore­cast of 2.8%, and ex­ceed that level next year.

Fac­tory out­put in August fell 2.4% from July, the fastest de­cline in 19 months. – Reuters

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