S. Korea’s economy to grow 2.0% this year, exports down 6.8%: economists

2019.08.07 15:50:10

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Economist in Korea turned more negative about Korea’s economic prospects against another setback on the trade front from Japanese export curbs, lowering this year’s outlook to 2.0 percent.

According to a survey on 18 economists by state think tank Korea Development Institute (KDI) on 18 economists, the country’s gross domestic product (GDP) growth was estimated at 2.0 percent, lowered from 2.2 percent projected in April and below the Bank of Korea’s target of 2.2 percent. Growth was estimated at 2.2 percent for next year.

The survey – released on Wednesday – is based on an arithmetic mean of 18 economists. It was conducted between July 25 and 29, after Japan’s export curbs on high-tech materials essential for the production of chips and displays shipped to Korea, and before Japan removed Korea from its whitelist of trusted trade countries. It was also conducted before the United States designated China as a currency manipulator.

The survey showed that Korea’s exports by value are likely to remain sluggish until the end of this year and decline 6.8 percent, steeper than 2.9 percent fall projected in April. Next year, outbound shipments would grow 1.3 percent, they projected.

The survey showed that Korea’s current account surplus would reach $52.7 billion this year, down from $76.4 billion last year. The outlook is lower than April’s projection of $58.6 billion. Economists projected current account surplus to remain at $48.1 billion next year.

Korea’s jobless rate would stand at 4.1 percent this year due to slowing down of the real economy, and 4 percent next year, according to the survey. Economists projected 200,000 more jobs to be added this year from a year ago and 180,000 next year.

Korea’s consumer prices would grow 0.7 percent this year from a year ago and 1.1 percent next year, the survey showed.

KDI, meanwhile, said that a majority of respondents expected the Bank of Korea to deliver the second cut this year in the fourth quarter.

By Moon Jae-yong and Lee Eun-joo

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