South Korea's president said Saturday that his country's economy could shrink during the first half of 2009 for the first time since the Asian financial crisis of 1997.
President Lee Myung-bak said that while South Korea's economy may see positive economic growth for 2009 as a whole, it could contract during the first two quarters of the year. He cited the global economic slowdown and South Korea's dependence on external markets.
Earlier this month, South Korea's central bank predicted the country's economy would grow 0.6 percent in the first half of 2009 and 3.3 percent in the second half.
South Korea's top two automakers recently slashed sales forecasts by 12 percent. Hyundai Motors and Kia also announced they were implementing "emergency management" and freezing the salaries of their managers.
Earlier this month, another South Korean car company - Chinese-owned Ssangyong Motors - told workers it could not pay them their weekly salaries due to lagging sales.
Some information for this report was provided by AFP, AP and Reuters.