S. Korea set for normal expansion
By Kelly Olsen |
December 11, 2010, Saturday
|
Print Edition
Print Edition
SOUTH Korea's economic growth is set to slow to a more normal level of 4.5 percent next year, its central bank said yesterday in a report that warned of significant uncertainties for the outlook, including tensions with North Korea.
Next year's growth will slow down from the estimated expansion of 6.1 percent for 2010, a year in which South Korea's recovery from the global financial crisis and subsequent worldwide slowdown accelerated.
South Korea is the world's 15th-largest economy and an export powerhouse home to major global firms, including Samsung Electronics Co and Hyundai Motor Co.
The Bank of Korea injected a note of caution into its outlook for next year, saying it is "attended by a considerable degree of uncertainty."
The bank cited "geopolitical risks" in the aftermath of a deadly North Korean attack on a South Korean island last month that sent tensions on their divided peninsula soaring. It also highlighted the "unknowns" of European debt problems, rising Chinese inflation and how monetary policy at the United States Federal Reserve will develop following its move to purchase US$600 billion of government bonds.
South Korea's economy rebounded strongly this year after sputtering to a meager 0.2 percent rise in 2009 following the crisis and slump.
Growth of 4.5 percent next year "can be assessed as a level close to the trend level," the bank said in the report, highlighting that this year's strength followed last year's low base.
The 4.5 percent figure for next year was unchanged from the bank's July outlook, though the 6.1 percent forecast for this year was raised from the previous 5.9 percent.
Its economy, Asia's fourth-largest, will feel the brunt of next year's slowdown in the first half of 2011, according to the bank.
Next year's growth will slow down from the estimated expansion of 6.1 percent for 2010, a year in which South Korea's recovery from the global financial crisis and subsequent worldwide slowdown accelerated.
South Korea is the world's 15th-largest economy and an export powerhouse home to major global firms, including Samsung Electronics Co and Hyundai Motor Co.
The Bank of Korea injected a note of caution into its outlook for next year, saying it is "attended by a considerable degree of uncertainty."
The bank cited "geopolitical risks" in the aftermath of a deadly North Korean attack on a South Korean island last month that sent tensions on their divided peninsula soaring. It also highlighted the "unknowns" of European debt problems, rising Chinese inflation and how monetary policy at the United States Federal Reserve will develop following its move to purchase US$600 billion of government bonds.
South Korea's economy rebounded strongly this year after sputtering to a meager 0.2 percent rise in 2009 following the crisis and slump.
Growth of 4.5 percent next year "can be assessed as a level close to the trend level," the bank said in the report, highlighting that this year's strength followed last year's low base.
The 4.5 percent figure for next year was unchanged from the bank's July outlook, though the 6.1 percent forecast for this year was raised from the previous 5.9 percent.
Its economy, Asia's fourth-largest, will feel the brunt of next year's slowdown in the first half of 2011, according to the bank.
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