[Reporter : ] "Korea's finance ministry recently cut its growth outlook for Korea to 3.3 percent. This is bad news, of course, but how is this compared to other major economies around the globe[Interview : Huh In, Head of Intl. Finance Team
Korea Institute for Intl. Econ. Policy] "Due to the worsening European financial crisis, the expectation on economic growth has been cutting down worldwide. So basically, the IMF expectation on the U.S. economy has been cut down by about 0.2 percentage point, so it's about on the same line. Our economy is slowing down together with the world economy."

Dr. Huh is one of many economists who blame the prolonged eurozone debt crisis as the main reason for the global economic slowdown.
But he says the latest countermeasures, such as the EU leaders' agreement to recapitalize Spain and Italy's ailing banks, provides a flicker of hope for a better second half.


[Interview : Huh In, Head of Intl. Finance Team
Korea Institute for Intl. Econ. Policy] "At the end of last month, the EU countries have agreed on some countermeasures such as the EFSF will be buying the problem bonds. So probably, it will calm down the financial markets and the world economy will be better off if we have some stable financial market."

Fortunately, Korea is not taking direct blows from the worsening eurozone crisis.
Take, for example, China who ships 20 percent of its goods to the troubled region.
Due to decreased demand from Europe, China's purchasing managers index, or PMI remained below the 50 point range for the eighth straight month in June.
A reading below 50 means that manufacturers' are feeling pessimistic about the nation's business conditions.
However, that doesn't mean Korea is completely safe.


[Interview : Huh In, Head of Intl. Finance Team
Korea Institute for Intl. Econ. Policy] "Basically, if we think about our destination of exports, only around ten percent is going directly to European countries but 25 percent, or quarter of our exports is headed to China. So we have to watch for how the Chinese economy does and how the Chinese government makes some countermeasures against the economic slowdown."

[Reporter : ] "Coming back to Korea, how will these external uncertainties affect the Korean economy[Interview : Huh In, Head of Intl. Finance Team
Korea Institute for Intl. Econ. Policy] "Basically, our exports have slowed down for the first half of this year. And because due to the base effect, the second half will be little bit better off, but we will be facing the slowdown from external demands."

One way to prepare for slowing overseas demand for this trade-dependent nation, according to Dr. Huh, is to substitute external demand with internal demand and in doing so, he says, a 3.3 percent growth could be an achievable goal.
Hwang Sung-hee, Arirang News.

Reporter : ssung86@arirang.co.kr