ID :
94366
Fri, 12/11/2009 - 08:19
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https://www.oananews.org//node/94366
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S. Korean economy to grow 4.6 pct in 2010: BOK
By Kim Soo-yeon
SEOUL. Dec. 11 (Yonhap) -- The South Korean economy will likely grow 4.6 percent next year as consumer spending and exports pick up, the central bank forecast Friday, underpinning optimism about a faster-than-expected economic recovery.
In a revised economic outlook, the Bank of Korea (BOK) upgraded its economic
forecast to 0.2 percent for this year, a turnaround from an earlier estimate of a
1.6 percent contraction. The 2010 growth forecast was also raised from its
previous projection of a 3.6 percent expansion.
"The growth momentum of the Korean economy will be boosted by a global economic
recovery and improving consumer and investment sentiment. With the impacts of the
stimulus packages declining, the private sector is expected to lead the growth,"
the BOK said in a statement.
In the fourth quarter of 2009, the economy is estimated to advance 0.3 percent
from three months earlier, slowing from a 3.2 percent expansion in the third
quarter. But the country's economic growth would reach 4.8 percent in 2011 on
the back of improving global economy.
The bright growth outlook came one day after the government said the country's
gross domestic product, the broadest measure of economic performance, is forecast
to grow 0.2 percent this year before jumping 5 percent next year.
On Thursday, the BOK froze its key interest rate at a record-low of 2 percent for
the 10th consecutive month but hinted that a rate rise may not be too far off
amid growing prospects of an economic recovery.
A set of economic data are underpinning optimism that the Korean economy is
quickly pulling out of its worst downturn in more than a decade, sparking debate
over when and how to roll back expansionary fiscal and monetary policies.
According to the BOK, exports, which account for about 50 percent of the
country's GDP, are forecast to expand 9.3 percent annually next year, up from a
0.1 percent contraction in 2009. Consumer spending will likely advance 3.6
percent 2010 after rising an estimated 0.3 percent gain this year, it added.
The country's inflation is likely to rise 2.8 percent next year, the same pace as
seen in 2009. But consumer inflation is forecast to pick up to 2.9 percent in the
second half on rising raw material costs after rising 2.7 percent in the first
six months of 2010. The BOK aims to keep annual inflation at 3 percent with a
margin of plus or minus 1 percentage point between 2010 and 2012.
The central bank also said Korea is forecast to post a current account surplus
worth of around US$17 billion next year, sharply down from an estimated $43
billion in 2009.
Economists are divided over when the BOK will begin to shift into a tight bias.
Some said the bank will likely raise borrowing costs in the first quarter of next
year, with some betting that a rate rise would be delayed into the first half,
citing still-murky economic uncertainty.
BOK Gov. Lee Seong-tae cast hawkish views on Thursday, saying that the current
level of the rate would be too low if the economy expands around 5 percent in
2010, which translates into 1 percent on-quarter growth in each quarter.
The BOK slashed the key rate by a total of 3.25 percentage points between October
2008 and February in a bid to help bolster the slumping economy.
sooyeon@yna.co.kr
SEOUL. Dec. 11 (Yonhap) -- The South Korean economy will likely grow 4.6 percent next year as consumer spending and exports pick up, the central bank forecast Friday, underpinning optimism about a faster-than-expected economic recovery.
In a revised economic outlook, the Bank of Korea (BOK) upgraded its economic
forecast to 0.2 percent for this year, a turnaround from an earlier estimate of a
1.6 percent contraction. The 2010 growth forecast was also raised from its
previous projection of a 3.6 percent expansion.
"The growth momentum of the Korean economy will be boosted by a global economic
recovery and improving consumer and investment sentiment. With the impacts of the
stimulus packages declining, the private sector is expected to lead the growth,"
the BOK said in a statement.
In the fourth quarter of 2009, the economy is estimated to advance 0.3 percent
from three months earlier, slowing from a 3.2 percent expansion in the third
quarter. But the country's economic growth would reach 4.8 percent in 2011 on
the back of improving global economy.
The bright growth outlook came one day after the government said the country's
gross domestic product, the broadest measure of economic performance, is forecast
to grow 0.2 percent this year before jumping 5 percent next year.
On Thursday, the BOK froze its key interest rate at a record-low of 2 percent for
the 10th consecutive month but hinted that a rate rise may not be too far off
amid growing prospects of an economic recovery.
A set of economic data are underpinning optimism that the Korean economy is
quickly pulling out of its worst downturn in more than a decade, sparking debate
over when and how to roll back expansionary fiscal and monetary policies.
According to the BOK, exports, which account for about 50 percent of the
country's GDP, are forecast to expand 9.3 percent annually next year, up from a
0.1 percent contraction in 2009. Consumer spending will likely advance 3.6
percent 2010 after rising an estimated 0.3 percent gain this year, it added.
The country's inflation is likely to rise 2.8 percent next year, the same pace as
seen in 2009. But consumer inflation is forecast to pick up to 2.9 percent in the
second half on rising raw material costs after rising 2.7 percent in the first
six months of 2010. The BOK aims to keep annual inflation at 3 percent with a
margin of plus or minus 1 percentage point between 2010 and 2012.
The central bank also said Korea is forecast to post a current account surplus
worth of around US$17 billion next year, sharply down from an estimated $43
billion in 2009.
Economists are divided over when the BOK will begin to shift into a tight bias.
Some said the bank will likely raise borrowing costs in the first quarter of next
year, with some betting that a rate rise would be delayed into the first half,
citing still-murky economic uncertainty.
BOK Gov. Lee Seong-tae cast hawkish views on Thursday, saying that the current
level of the rate would be too low if the economy expands around 5 percent in
2010, which translates into 1 percent on-quarter growth in each quarter.
The BOK slashed the key rate by a total of 3.25 percentage points between October
2008 and February in a bid to help bolster the slumping economy.
sooyeon@yna.co.kr
