3% Level in 3 Years
The Korean government predicted the nation’s GDP growth of 3.0 percent this year in the new government’s economic policy direction announced on July 25.
In December of last year, the government forecast that Korea’s GDP would only grow 2.6 percent from the previous year in its "2017 economic policy direction" and raised the forecast growth by 0.4 percentage points in seven months.
The government believes that Korea’s economic growth rate will rise thanks to policy effects such as a recovery in exports and investment following an improvement in the global economy and additional budget of 11 trillion won.
The government, which announced 3.0% as the growth rate of 2017 in an announcement of economic policies in the second half of last year, lowered the rate by 0.4% points in December last year, forecasting a slowdown in domestic demand due to oil prices and a pressure to raise the interest rate.
Exports rose for the eighth consecutive month last month as they began to recover in November last year. According to tentative figures announced by the Ministry of Commerce, Industry and Energy, last month, exports (based on customs clearance statistics) amounted to 51.4 billion dollars, the highest since October of 2014 (US$51.6 billion). The figure is a jump of 13.7% from a year ago, and recorded double-digit growth for six consecutive months from January this year.
Exports in the first half of this year totaled US$233.6 billion, up 15.8% from the same period of last year. The figure is well above the export growth of 2.9 percent expected by the government at the end of last year.
But, the government expected Korea’s economic growth momentum to weaken slightly as a recovery in consumption is delayed due to a slowdown in facility investment and export growth which had been solid in the first half.
The government expected the nominal economic growth rate to which the price level is applied to reach 4.6 percent this year. In addition, the government forecast that private consumption will rise 2.3 percent, facility investment, 9.6 percent, construction investment, 6.7 percent, and intellectual property investment, 2.8 percent, respectively.
According to the government’s forecast, the Korean economy will recover to a growth rate of 3% in three years since 2014 when it grew 3.3%. The Korean economy grew by 2.8% in 2015 and last year for the second consecutive year.