Economic Growth Forecast

Samseong Station intersection in Daechi-dong, Seoul, South Korea. The entire surrounding district was created in the last 50 years, a product of Korea's growing economy.
Samseong Station intersection in Daechi-dong, Seoul, South Korea. The entire surrounding district was created in the last 50 years, a product of Korea's growing economy.

 

The Korea Institute of Finance expects Korea’s economy to grow by 4% next year. 

At the “2013 Financial Trend and 2014 Outlook” on October 30, Researcher Park Sung-wook of the Korea Institute of Finance said, “Exports and investments will support growth in 2014,” and added, “The annual economic growth rate will slightly exceed the potential growth rate [3.6%-3.7%].”

Park’s anticipated growth rate is the highest estimate when compared to all other domestic and international facilities. Previously, the International Monetary Fund (IMF) expected Korea’s economic growth rate to be 3.7%, the Bank of Korea 3.8%, and the Ministry of Strategy and Finance 3.9%.

Park expected the rate of increase for next year’s capital investment to be 7.5%, which is far more than this year’s (estimated 2.3%), leading an economic recovery. He explained this effect is caused by the government’s investment activation measures and increase in exports. 

With the global economy recovering, he expected the rate of increase for next year’s exports to be 6.7%, which is higher than this year’s (estimated 5.4%). Park believes capital investments and exports will play leading roles in 4% growth.  

On the other hand, he expected next year’s public consumption to increase 3.2%. This is higher than this year’s (1.9%), but relatively low compared to the economic growth rate. 

He estimated next year’s inflation rate to be around 2.4%. He also estimated next year’s current account to see a huge surplus of US$52.9 million, following this year’s (estimated US$61.7 million). Also, he expected the exchange rate to be an annual average of 1,074 won per 1 dollar. 

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