Revised Downward Its Economic Growth Forecast for Korea

The IMF has adjusted its economic growth forecast for Korea from 3.6% to 3.2% for this year.

The organization provided G20 member nations with a revised growth forecast report before the G20 Financial Ministers and Central Bank Governors Meeting held recently in Moscow, Russia. According to the report, Korea is expected to record an economic growth rate of 3.2% and 3.9% in 2013 and 2014, respectively. The estimate for this year has been cut by 0.4 percentage points when compared to the World Economic Outlook Report published in October 2012. The global economic growth rate for this year, in the meantime, has not changed during the period.

Experts are saying that the downward revision has already been predicted in that a number of other organizations both at home and abroad have lowered their estimates one after another. The Korea Development Institute, for example, cut its rate from 3.4% to 3.0% in November last year to voice the need for a revised supplementary budget. The Ministry of Strategy and Finance lowered its estimate by one percentage point to 3.0% in the following month, too. The Bank of Korea came up with an estimate of 2.8% in January this year, 0.4 percentage points down from its previous announcement back in October 2012.

Economic research institutes in the private sector are even more conservative. According to the Korea Center for International Finance, 10 foreign investment banks’ forecast stood at an average of 2.9% as of the end of last month. Nomura and Deutsche Bank suggested a rate of 2.5% each while the Bank of America’s and JP Morgan’s were at 2.6% and 2.8%, respectively.