S. Korea's economy forecast to shrink 0.6 pct this year: think tank

SEOUL, Sept. 20 (Yonhap) -- South Korea's economy is expected to shrink 0.6
percent this year, a local think tank said Sunday, revising up its earlier growth
outlook amid mounting signs that the worst downturn in more than a decade might
be nearing an end.
The latest growth prediction by LG Economic Research Institute is higher than its
June prediction of negative 1.7 percent and better than the government's outlook
of negative 1.5 percent for this year.
The think tank also expected that the economy will grow 4.2 percent next year on
brisk exports bolstered by a global economic rebound.
"Global recovery-triggered increases in exports will raise the overall growth
rate, bringing South Korea's gross domestic product to pre-Lehman crisis levels
during the second quarter of next year," it said in a report.
The think tank predicted that the nation's exports will grow 15 percent next year
after contracting 14.8 percent this year, giving momentum for a rebound. The
nation's current account surplus, however, was projected to narrow to US$9.7
billion next year from an estimated $36.3 billion for this year.
Private consumption will grow 3.7 percent in 2010 after shrinking 1.4 percent
this year, the report forecast. Facility investment will also rebound by growing
8.1 percent after plunging 11.5 percent this year.
The think tank predicted the won-dollar exchange rate will hover at an average of
1,208 won during the second half of this year but will fall to 1,140 won next
year.
The unemployment rate is expected to stay at 3.4 percent next year, while
consumer prices will decline 2.7 percent from a 2.9 percent rise estimated for
this year, according the report.
kokobj@yna.co.kr
(END)