South Korea's government on Thursday revised down its growth projections for the economy as the fiscal woes in the US and the prolonged debt crisis in Eurozone continued to weigh on the country's economic prospects.
The Ministry of Strategy and Finance now expects the gross domestic product to grow 3 percent in 2013, a notably weaker pace than the previously forecast 4 percent growth. The ministry estimates this year's GDP growth at 2.1 percent, lower than its September projection of 3.3 percent.
The Finance Ministry cited continued external uncertainties as the main reason behind the outlook downgrade.
The ministry expects South Korea's current-account surplus to fall to $30 billion in 2013 from an estimated $42 billion this year. Inflation is expected to be at 2.7 percent next year, within the central bank's new target range of 2.5-3.5 percent.
Meanwhile, in another report on Thursday, the Bank of Korea said the domestic economy is expected to show a trend of mild recovery. Given the slow pace of recovery in growth, the output gap is forecast to stay negative, it added.
The growth rate of the domestic economy is projected to gradually increase from the middle of next year, on the back primarily of the global economic recovery. However, the uncertainties concerning the future growth path will run high due mostly to the euro area fiscal crisis, according to the report.
A survey by the central bank revealed today that the South Korean manufacturers' sentiment for January rebounded after falling to the lowest in more than three years in December. The expectations index for January rose to 70 from 67 in December.
by RTT Staff Writer
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