ID :
94214
Thu, 12/10/2009 - 16:43
Auther :
Shortlink :
https://www.oananews.org//node/94214
The shortlink copeid
S. Korea to avoid negative growth, expand 0.2 pct this year: gov't report
(ATTN: ADDS comparison with earlier forecast in 2nd para; RECASTS 3rd para; ADDS
finance minister's comments in last 2 paras)
SEOUL, Dec. 10 (Yonhap) -- South Korea's economy will likely avoid negative
growth this year as it continues to make a "faster-than-expected" recovery amid
rebounding consumption, investment and other upbeat indicators, a government
report showed Thursday.
The nation's gross domestic product is forecast to grow 0.2 percent this year
before jumping 5 percent next year, according to the report by the Ministry of
Strategy and Finance. This year's growth forecast is much higher than an earlier
outlook of negative 1.5 percent.
"During the third quarter, GDP growth returned to pre-crisis levels, continuing
its recovering trend. Private sector consumption and facility investment also
kept upward momentum. The declining pace of inventory levels has slowed since the
third quarter, while the overall contribution from domestic demand is on the
rise," said the report, which was unveiled as part of the government's annual
economic management plan for next year.
The government's growth forecast is broadly in line with growing optimism that
the nation's economy could manage to avoid a contraction. The outlook is based on
the premise that the global economy will expand 3.1 percent and oil prices will
stay at an average of US$80 per barrel next year.
Major think tanks support such an upbeat forecast for Asia's fourth-largest
economy, saying the country is making a faster-than-expected recovery from the
steep downturn sparked by last year's financial turmoil and resulting global
recession.
The Organization for Economic Cooperation and Development recently revised its
outlook for the Korean economy, forecasting a 0.1 percent expansion this year
before rebounding 4.4 percent next year.
On Wednesday, the International Monetary Fund followed suit by forecasting that
the economy will grow 0.25 percent this year before expanding 4.5 percent in
2010.
The revisions are in sharp contrast with a year ago, when the government was
deeply concerned that the economy could contract for the first time in more than
a decade amid plunging exports and domestic demand.
Current predictions forecast that all indicators, including consumption, exports
and investment, will rebound next year, helping the nation achieve robust growth.
Under the annual economic management plan, the government expects that private
consumption will grow 0.4 percent this year before jumping 5 percent next year.
Facility investment is also expected to post a double-digit expansion of 11
percent next year, a sharp turnaround from this year's 9.8 percent decline.
Exports will likely shrink 13.9 percent this year but are projected to jump 13.2
percent annually for 2010. Imports will also rise 21.1 percent thanks to
increasing spending amid an economic recovery, compared with a 26 percent
contraction this year.
South Korea's current account surplus, however, will decline from an estimated
$42 billion for this year to $15 billion for next year, according to the report.
As for the labor market, the ministry said that the number of people employed
will increase by 200,000 next year, compared with a decline of 70,000 for this
year. Consumer prices are expected to rise 3 percent from 2.8 percent for 2009,
the report showed.
Despite the overall improvement, the government noted that it will continue its
expansionary policy stance "for the time being," pursuing active fiscal spending
aimed at propping up the economy. It will, however, "steadily normalize" its
macroeconomic policy stance in consideration of economic and job market
conditions.
"Next year will be a critical turning point that will determine the future of our
economy," Finance Minister Yoon Jeung-hyun said in a press conference.
"We drew up the management plan for next year, taking into account that
uncertainty remains high. We will keep our expansionary macroeconomic policy
stance for the time being to solidify economic growth momentum," he added.
kokobj@yna.co.kr
(END)
finance minister's comments in last 2 paras)
SEOUL, Dec. 10 (Yonhap) -- South Korea's economy will likely avoid negative
growth this year as it continues to make a "faster-than-expected" recovery amid
rebounding consumption, investment and other upbeat indicators, a government
report showed Thursday.
The nation's gross domestic product is forecast to grow 0.2 percent this year
before jumping 5 percent next year, according to the report by the Ministry of
Strategy and Finance. This year's growth forecast is much higher than an earlier
outlook of negative 1.5 percent.
"During the third quarter, GDP growth returned to pre-crisis levels, continuing
its recovering trend. Private sector consumption and facility investment also
kept upward momentum. The declining pace of inventory levels has slowed since the
third quarter, while the overall contribution from domestic demand is on the
rise," said the report, which was unveiled as part of the government's annual
economic management plan for next year.
The government's growth forecast is broadly in line with growing optimism that
the nation's economy could manage to avoid a contraction. The outlook is based on
the premise that the global economy will expand 3.1 percent and oil prices will
stay at an average of US$80 per barrel next year.
Major think tanks support such an upbeat forecast for Asia's fourth-largest
economy, saying the country is making a faster-than-expected recovery from the
steep downturn sparked by last year's financial turmoil and resulting global
recession.
The Organization for Economic Cooperation and Development recently revised its
outlook for the Korean economy, forecasting a 0.1 percent expansion this year
before rebounding 4.4 percent next year.
On Wednesday, the International Monetary Fund followed suit by forecasting that
the economy will grow 0.25 percent this year before expanding 4.5 percent in
2010.
The revisions are in sharp contrast with a year ago, when the government was
deeply concerned that the economy could contract for the first time in more than
a decade amid plunging exports and domestic demand.
Current predictions forecast that all indicators, including consumption, exports
and investment, will rebound next year, helping the nation achieve robust growth.
Under the annual economic management plan, the government expects that private
consumption will grow 0.4 percent this year before jumping 5 percent next year.
Facility investment is also expected to post a double-digit expansion of 11
percent next year, a sharp turnaround from this year's 9.8 percent decline.
Exports will likely shrink 13.9 percent this year but are projected to jump 13.2
percent annually for 2010. Imports will also rise 21.1 percent thanks to
increasing spending amid an economic recovery, compared with a 26 percent
contraction this year.
South Korea's current account surplus, however, will decline from an estimated
$42 billion for this year to $15 billion for next year, according to the report.
As for the labor market, the ministry said that the number of people employed
will increase by 200,000 next year, compared with a decline of 70,000 for this
year. Consumer prices are expected to rise 3 percent from 2.8 percent for 2009,
the report showed.
Despite the overall improvement, the government noted that it will continue its
expansionary policy stance "for the time being," pursuing active fiscal spending
aimed at propping up the economy. It will, however, "steadily normalize" its
macroeconomic policy stance in consideration of economic and job market
conditions.
"Next year will be a critical turning point that will determine the future of our
economy," Finance Minister Yoon Jeung-hyun said in a press conference.
"We drew up the management plan for next year, taking into account that
uncertainty remains high. We will keep our expansionary macroeconomic policy
stance for the time being to solidify economic growth momentum," he added.
kokobj@yna.co.kr
(END)
