The state-run Korea Development Institute has cut the nation's growth forecast for next year from two-point-three percent to one-point-eight percent. Warning of an expected slowdown, the research institute attributed its grim outlook to sluggish exports and investment.Kim In-kyung has this report.
Anchor: The state-run Korea Development Institute has cut the nation's growth forecast for next year from two-point-three percent to one-point-eight percent. Warning of an expected slowdown, the research institute attributed its grim outlook to sluggish exports and investment.
Report: The Korea Development Institute(KDI) has forecast that the nation’s economy will post growth of only one-point-eight percent next year, below the potential growth rate of around two percent.
The state-run organization released the outlook on Thursday, projecting that growth in exports will slow sharply and tepid investment will continue in the second half of the year. The latest outlook is down half a percentage point from the institute’s May forecast.
The institute added that it expects private consumption will rise three-point-one percent in 2023, or lower than this year, amid a drop in real purchasing power due to high inflation and sluggish consumption in goods resulting from a rise in interest rates.
Exports are forecast to grow a mere one-point-six percent as goods exports recede amid a global economic slowdown.
The institute said the nation is expected to post a current account surplus of 16 billion dollars next year, dropping from this year’s 23 billion dollars due to an expanded deficit in the service account balance.
Despite the slump, inflation is projected to climb three-point-two percent in 2023, exceeding the Bank of Korea’s target of two percent.
The KDI advised the central bank to carry on its tight monetary policy, but consider the expected downturn in deciding the pace of interest rate hikes.
It also advised the government to create an environment in which women and the elderly may actively participate in the labor market, given the backdrop of weakening growth spurred by a rapidly aging trend.