SK lowers forecast for expansion in 2013
Source: Agencies |
March 29, 2013, Friday
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Print Edition
Print Edition
SOUTH Korea's government cut its forecast for growth in Asia's fourth-largest economy this year as exports stumble due to muted global demand and a weaker yen.
The finance ministry said yesterday that South Korea's economy will expand 2.3 percent this year. Three months ago it forecast 3 percent growth for 2013.
The lower forecast stems from the slower-than-expected global recovery, still weak investment and consumption at home and lack of consumer and corporate confidence, Finance Minister Hyun Oh-seok, told reporters.
"Vitality in South Korea's economy has fallen sharply," Hyun said.
"Situations ahead look tough. We cannot expect a significant improvement in exports."
South Korean manufacturers are struggling with weak overseas demand and keen competition from Japan where a new government has talked down the value of the yen, giving a boost to its exporting powerhouses such as Toyota Motor Corp.
The ministry said it will aid an economic recovery with a stimulus plan and spending over 60 percent of the annual budget during the first half of the year.
Details of the stimulus spending will be announced next month, it said.
Hyundai Research Institute estimates that South Korea needs 11 trillion won (US$9.9 billion) of extra government spending to add half a percentage point to growth.
The finance ministry said yesterday that South Korea's economy will expand 2.3 percent this year. Three months ago it forecast 3 percent growth for 2013.
The lower forecast stems from the slower-than-expected global recovery, still weak investment and consumption at home and lack of consumer and corporate confidence, Finance Minister Hyun Oh-seok, told reporters.
"Vitality in South Korea's economy has fallen sharply," Hyun said.
"Situations ahead look tough. We cannot expect a significant improvement in exports."
South Korean manufacturers are struggling with weak overseas demand and keen competition from Japan where a new government has talked down the value of the yen, giving a boost to its exporting powerhouses such as Toyota Motor Corp.
The ministry said it will aid an economic recovery with a stimulus plan and spending over 60 percent of the annual budget during the first half of the year.
Details of the stimulus spending will be announced next month, it said.
Hyundai Research Institute estimates that South Korea needs 11 trillion won (US$9.9 billion) of extra government spending to add half a percentage point to growth.
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