Seoul, South Korea (4E) – The South Korean government has cut the outlook for the country’s economic growth for 2012 and 2013 as the ongoing euro zone debt crisis and U.S. fiscal troubles continue to dampen the global economy.
The Ministry of Strategy and Finance said that real gross domestic product (GDP) was estimated to grow by 3 per cent at an annualized basis in 2013, which is lower compared to the 4 per cent growth forecasted six months ago. This year’s growth outlook was also slashed to 2.1 per cent from the previous estimate of 3.3 per cent.
Exports, which comprise about half of the country’s economy, has suffered recently due to a broad slowdown seen in developed economies.
The Ministry added that imports will rise to 4.6 per cent next year, putting the annual current account surplus at $30bn, lower than the $42bn estimated for this year.
The lower GDP forecast is in line with the October estimate by the International Monetary Fund for the global economy, which is seen to grow by 3.3 per cent for 2012, down from 3.5 per cent estimated in July. For next year, the lender also cut its forecast to 3.6 per cent from an earlier estimate of 3.9 per cent.
The South Korean economy is expected to improve in the second half of this year, with modest gains in the global economy and improving conditions overseas, according to the Ministry.