S. Korea cuts growth outlook for 2012, 2013
The South Korean government on Thursday slashed the nation's growth
outlook for 2012 and 2013, citing the eurozone debt crisis and US fiscal
woes that continue to dampen global demand.
In a biannual economic outlook, the finance ministry revised its
earlier estimate of 4.0 percent growth in 2013 to 3.0 percent, and the
2012 estimate from 3.3 percent to 2.1 percent.
"The economy continues to slow... as global demand dragged down by
prolonged eurozone debt crisis and lingering uncertainty dampen
sentiment," the ministry said in a statement.
The growth of Asia's fourth-largest economy will continue to be
limited in the first half 2013, but will "slightly improve" in the
latter half when its major markets are expected to show signs of
recovery, it added.
Exports account for about a half of the South's economy and have been
pummelled recently by a general slowdown in developed countries. But the
ministry predicted overseas shipments of cars, mobile gadgets and other
products and services would increase 4.3 percent next year after
shrinking 1.3 percent in 2012.
The forecast was in line with a World Trade Organisation estimate
that global trade will expand 4.5 percent next year from 2.5 percent in
Imports will increase 4.6 percent in 2013, the finance ministry
added, resulting in an annual current account surplus of around $30
billion, down from this year's estimate of $42 billion.
Consumer prices are expected to rise 2.7 percent next year, faster
than this year's 2.2 percent but within the central bank's target range
of between 2.5 and 3.5 percent. The ministry pledged a "flexible" fiscal
policy to help stimulate the economy, including frontloading at least 60
percent of the entire 2013 budget in the first half of the year.