World Economic

South Korea’s economy will be stronger next year, helped by a recovery in global demand, Finance Minister Yoon Jeung Hyun said.

“I think next year the economy will be much better than this year,” Yoon said in an interview with Bloomberg from his office in Gwacheon today. South Korea still faces “many uncertainties” in the global markets as the economy remains dependent on exports, he said.

South Korea’s economy expanded 2.6 percent in the second quarter, the fastest pace in almost six years, and the benchmark Kospi stock index has risen more than 45 percent this year on rising expectations for an economic recovery.

The nation’s central bank cut the benchmark interest rate by 3.25 percentage points from October to February, the most aggressive easing since it began setting a policy rate a decade ago, to cushion the economy from the global recession. The government also increased spending this year to support demand.

Yoon said such policies helped to prevent the country from facing an economic slowdown guaranteed payday loan.

“The Korean administrative system, the tax and execution system, are well-developed compared with other countries,” Yoon said. “We’re a small, open economy and we can manage the economy better because we have the comparative advantage from being a small-scaled economy.”

The recent movement of the dollar is a “globally universal situation,” Yoon said, adding that he expects the U.S. currency will “recover” when global economies pick up.

South Korea’s won has been Asia’s best-performed currency in the past three months, rising 9.4 percent against the dollar.

The finance ministry forecasts the economy will expand about 4 percent next year, after contracting 1.5 percent in 2009.

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