S. Korean economy forecast to grow 3.4 pct in 2009

SEOUL, Oct. 29 (Yonhap) -- The South Korean economy is forecast to grow 3.4
percent next year due mainly to faltering domestic demand and slowing export
growth while the country's inflation will likely ease to 3.5 percent, a private
think tank said Wednesday.
Asia's fourth-largest economy is expected to expand 2.9 percent in the first half
of next year before growing 3.8 percent during the last six months of 2009, the
Korea Institute of Finance (KIF) said.
Its outlook is lower than forecasts of the country's other private think tanks.
Samsung Economic Research Institute forecast the growth rate of the economy to
reach 3.6 percent.
"Consumer spending is likely to grow 2 percent and export growth is expected to
sharply cool to 6 percent next year from 21.1 percent in 2008 amid a global
recession," the KIF said.
Bank of Korea (BOK) Gov. Lee told lawmakers last week that it would be difficult
for the local economy to make 4 percent growth next year, although it may see
growth in the 3-percent range. He expected that exports would not see
double-digit growth in 2009. The Korean economy expanded 5 percent in 2007.
Meanwhile, the KIF said the country's consumer inflation is expected to rise 3.5
percent on-year in 2009 although its easiness may be limited due to a weaker won
and possible gains in public charges. The BOK, the country's central bank, is
aiming to keep inflation to between 2.5 and 3.5 percent until 2009.