S. Korea's economy may expand 4.3 pct in 2010: Samsung

SEOUL, Nov. 26 (Yonhap) -- The South Korean economy is expected to grow 4.3
percent next year, recovering from a projection of 0.2 percent growth this year,
a private researcher said Thursday.
The 2010 forecast of gross domestic product by Samsung Economic Research
Institute is more optimistic than that of the Ministry of Strategy and Finance,
which expected the economy to grow 4 percent next year.
The 2010 outlook is a notable increase from Samsung's previous forecast of 3.9
percent growth.
However, Samsung warned that it would be premature for the government to
implement a so-called exit strategy, or measures to withdraw its expansionary
fiscal policies.
"Even if the economic growth rate rises over 4 percent next year, it will be
difficult to say that the Korean economy is pulling out of a crisis," Samsung
said in a report.
"So, it should be cautious in raising interest rates with various factors in
mind, such as the economic recovery, inflation and rising asset prices," the
report said.
Next year, private consumption is likely to grow 3.1 percent from a projection of
0.2 percent growth this year, according to the report.
Facility investment will rise 8.2 percent next year, from an expected 11.1
percent contraction this year, it said.
The Bank of Korea has kept its key interest rate unchanged at a record low of 2.0
percent for nine straight months.
Earlier in the day, the central bank widened its inflation target to between 2.0
percent and 4.0 percent for the 2010-2012 period, compared with a 2.5-3.5 percent
set for 2007-2009.
Analysts say the widened inflation target may indicate a modest pace of
tightening monetary policy, but the central bank said the new target represented
no change in its policy stance.
(END)