ID :
35269
Sat, 12/13/2008 - 05:01
Auther :
Shortlink :
https://www.oananews.org//node/35269
The shortlink copeid
(2nd LD) S. Korean economic growth to cool to 2 pct in 2009: BOK
(ATTN: UPDATES with remarks by central bank official in paras 6,7; TRIMS throughout)
By Kim Soo-yeon
SEOUL, Dec. 12 (Yonhap) -- The South Korean economy is expected to grow at the slowest pace in 11 years in 2009 as a global recession will likely hurt exports amid stubbornly weak domestic demand, the central bank said Friday.
The country's gross domestic product (GDP) is forecast to grow 2 percent in 2009,
down from an estimated 3.7 percent advance for this year, according to the Bank
of Korea (BOK). Asia's fourth-largest economy grew a robust 5 percent last year.
The 2009 growth prediction would mark the lowest level since a 6.9 percent
contraction in 1998 in the aftermath of the Asian financial crisis. In the fourth
quarter of this year, the economy is estimated to fall 1.6 percent from the
previous quarter, marking the first quarterly contraction in more than five
years.
But the BOK said the nation's economic growth would reach 4 percent in 2010 as
the global economy is likely to gradually recover.
GDP, the broadest measure of an economy's performance, is the total value of
goods and services produced within the economy in a given period.
"Export growth is expected to lose steam next year amid the global slump.
Consumer spending and facility investment will also weaken with job markets
remaining stagnant," Kim Jae-chun, director-general at the BOK's research
department, told a press conference.
"If the global economy turns out worse than expected next year, the growth of the
South Korean economy will likely fall further."
The gloomy growth outlook comes a day after the BOK slashed its key interest rate
by a record full percentage point to an all-time low of 3 percent, the fourth
rate cut in two months, to bolster the cooling economy. The government has
unveiled a raft of economic stimulus packages such as additional fiscal spending
and tax cuts.
The GDP forecast cut by the BOK follows similar moves by global investment banks
and international bodies. The International Monetary Fund lowered its growth
prediction for the Korean economy to 2 percent from 3.5 percent. Major global
investment banks predicted an average of 1.2 percent for South Korea. Despite
this, the government is still aiming for 4 percent growth.
According to the BOK, exports, which account for about 60 percent of the
country's GDP, are forecast to expand 1.3 percent annually next year, down
sharply from an expected 3.6 percent rise for 2008. Consumer spending will likely
advance a mere 0.8 percent in 2009 after rising an estimated 1.5 percent this
year, it added.
The country's overseas shipments, which have propped up the Korean economy, have
already shown signs of slowing down as the global downturn has dealt a blow to
emerging markets like China -- the top importer of Korean goods. Korean exports
declined 18.3 percent on-year in November, the biggest drop in seven years.
"Sluggish domestic demand and faltering exports are reinforcing a dimmer economic
growth outlook," said Lee Sang-jae, an economist at Hyundai Securities Co. "I
think the BOK is expected to cut the key rate to 2 percent until the first half
of next year."
Meanwhile, the BOK expected the country's inflation to slow to 3 percent next
year from a 10-year high of 4.7 percent in 2008, as falling oil prices will
likely outweigh a weaker local currency. The BOK aims to keep annual inflation
between 2.5 percent and 3.5 percent until 2009.
The central bank also said Korea's current account is expected to swing to a
surplus of US$22 billion next year. The country is expected to log its first
annual deficit in 11 years, totaling $4.5 billion, in 2008.
Experts say the sharp slowdown and eased inflation may give room for the BOK to
further lower its borrowing costs.
"Given the worsening economic activities and global financial uncertainties, the
BOK is likely to continue its monetary easing until the first half of next year,"
said Lee Sung-kwon, an economist at Goodmorning Shinhan Securities Co.
The BOK has trimmed the policy rate by a combined 2.25 percentage points from
5.25 percent since early October in an effort to keep global financial turmoil
from impacting the real economy.
sooyeon@yna.co.kr
(END)
By Kim Soo-yeon
SEOUL, Dec. 12 (Yonhap) -- The South Korean economy is expected to grow at the slowest pace in 11 years in 2009 as a global recession will likely hurt exports amid stubbornly weak domestic demand, the central bank said Friday.
The country's gross domestic product (GDP) is forecast to grow 2 percent in 2009,
down from an estimated 3.7 percent advance for this year, according to the Bank
of Korea (BOK). Asia's fourth-largest economy grew a robust 5 percent last year.
The 2009 growth prediction would mark the lowest level since a 6.9 percent
contraction in 1998 in the aftermath of the Asian financial crisis. In the fourth
quarter of this year, the economy is estimated to fall 1.6 percent from the
previous quarter, marking the first quarterly contraction in more than five
years.
But the BOK said the nation's economic growth would reach 4 percent in 2010 as
the global economy is likely to gradually recover.
GDP, the broadest measure of an economy's performance, is the total value of
goods and services produced within the economy in a given period.
"Export growth is expected to lose steam next year amid the global slump.
Consumer spending and facility investment will also weaken with job markets
remaining stagnant," Kim Jae-chun, director-general at the BOK's research
department, told a press conference.
"If the global economy turns out worse than expected next year, the growth of the
South Korean economy will likely fall further."
The gloomy growth outlook comes a day after the BOK slashed its key interest rate
by a record full percentage point to an all-time low of 3 percent, the fourth
rate cut in two months, to bolster the cooling economy. The government has
unveiled a raft of economic stimulus packages such as additional fiscal spending
and tax cuts.
The GDP forecast cut by the BOK follows similar moves by global investment banks
and international bodies. The International Monetary Fund lowered its growth
prediction for the Korean economy to 2 percent from 3.5 percent. Major global
investment banks predicted an average of 1.2 percent for South Korea. Despite
this, the government is still aiming for 4 percent growth.
According to the BOK, exports, which account for about 60 percent of the
country's GDP, are forecast to expand 1.3 percent annually next year, down
sharply from an expected 3.6 percent rise for 2008. Consumer spending will likely
advance a mere 0.8 percent in 2009 after rising an estimated 1.5 percent this
year, it added.
The country's overseas shipments, which have propped up the Korean economy, have
already shown signs of slowing down as the global downturn has dealt a blow to
emerging markets like China -- the top importer of Korean goods. Korean exports
declined 18.3 percent on-year in November, the biggest drop in seven years.
"Sluggish domestic demand and faltering exports are reinforcing a dimmer economic
growth outlook," said Lee Sang-jae, an economist at Hyundai Securities Co. "I
think the BOK is expected to cut the key rate to 2 percent until the first half
of next year."
Meanwhile, the BOK expected the country's inflation to slow to 3 percent next
year from a 10-year high of 4.7 percent in 2008, as falling oil prices will
likely outweigh a weaker local currency. The BOK aims to keep annual inflation
between 2.5 percent and 3.5 percent until 2009.
The central bank also said Korea's current account is expected to swing to a
surplus of US$22 billion next year. The country is expected to log its first
annual deficit in 11 years, totaling $4.5 billion, in 2008.
Experts say the sharp slowdown and eased inflation may give room for the BOK to
further lower its borrowing costs.
"Given the worsening economic activities and global financial uncertainties, the
BOK is likely to continue its monetary easing until the first half of next year,"
said Lee Sung-kwon, an economist at Goodmorning Shinhan Securities Co.
The BOK has trimmed the policy rate by a combined 2.25 percentage points from
5.25 percent since early October in an effort to keep global financial turmoil
from impacting the real economy.
sooyeon@yna.co.kr
(END)
