S. Korean economy to grow 5% next year: finance ministry
2010-12-15 16:02:34
The South Korean economy will likely post a 5 percent growth next year on the back of global market and domestic demand recovery, the government said Tuesday.
"Driven by a steady global recovery pace and domestic demand growth, the South Korean economy is expected to grow 5 percent next year," the nation's finance ministry said in a report on its 2011 economy management plan.
The growth pace, according to the Ministry of Strategy and Finance, is likely to be higher in the second half, compared to the first half, with the growth rate likely to increase around 1 percent quarter-on-quarter.
The ministry predicted that domestic demand will play a greater role as the economy expands, with the net growth contribution of domestic demand continuing to grow.
In particular, private spending is expected to grow some 4 percent, while facilities investment is forecast to expand at a range of 7 percent on-year.
The ministry, however, warned there still remains a possibility the growth may decelerate due to lingering uncertainties, although it affirmed the economy will stay on a rising trend.
The data, according to the ministry, was based on an assumption that the world economy will grow 4.2 percent next year, with average of oil prices fixed at 85 U.S. dollars per barrel.
The newly released growth outlook for 2011, meanwhile, was much lower than the government's earlier projection of a 6.1 percent growth.
The forecast also marked a notable difference with growth outlooks announced by other institutes, including the central bank and the state-run Korea Development Institute (KDI).
The KDI predicted a 4.2 percent growth for 2011, while the Bank of Korea (BOK) last week forecast a 4.5 percent growth for the same period.
"The South Korean economy is staying on a normalizing track after a swift rebound from the financial crisis," the report by the finance ministry said.
"At this moment, we expect that the recovery will continue, but it is still necessary to pay keen attention to the possibility that the economy may make a downturn," it added.