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South Korean economy affected by war on Iraq

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Saddam Hussein’s message on Monday of Iraq’s unwillingness to surrender came as confirmation to South Korean market insiders that the war would drag on longer than expected. What this means for the South Korean market is an expected decline – that was seen in the first decline in five days for the Korea Composite Stock Price Index (KOSPI), which dropped by 5.92 to 569.85 on Monday.

Bank of Korea Vice Governor Kang Hyeong-mun forecasted an annual economic growth of five percent but only on three conditions: an early end to the war, a global oil price decline to US$20 per barrel, and the improvement of advanced countries’ economies. Many of the nation’s economic experts are not completely optimistic about these three conditions being met by this year, and are looking for ways to cope with the global effects of the war, which the Ministry of Finance and Economy concluded had entered a new phase on Monday.

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