Dr. Doom bullish on South Korea

Permabear economist Nouriel Roubini has found an economy that even he can feel good about, and it’s a place you might not expect given recent events. Bloomberg’s William Pesek reports:

Recent Korean data “suggest there is the beginning of an economic recovery, and growth might be already positive in the second quarter,” Roubini said at a May 27 conference in Seoul….

The reason Roubini says Korea may grow more than 1.5 percent next year is the economic-policy changes made over the last 10 years. The 1997-1998 Asian crisis seemed like a curse at the time. It devastated the nation of 49 million and forced the government to accept a humiliating International Monetary Fund bailout.

Today, that experience is proving to be a blessing in disguise. The government assessed the magnitude of its problems and admitted how bad things were. It allowed weak companies and commercial and merchant banks to fail. It acted quickly to rid balance sheets of bad assets. As a result, Korea was the first Asian economy to recover from the crisis and repay the IMF.

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