Economic growth projected at 8.9%:BOK

Declining export for the remainder of the year; but growth predicted at 8.9%, according to BOK

The Bank of Korea has estimated the annual growth of Korean economy would be about 8.9% with continued and steady growth of the Korean economy in the second half of the year.

The BOK further predicted that with the steady increase of imported goods, the total account surplus would be about 9 billion dollars, less than earlier expectations.

In the financial outlook report for the second half of the year 2000, although there would be a decline in the domestic consumer market and export growth, however, with the steady increase of spending by domestic consumption and investments made by industries for improvements, the annual GDP growth rate would be 7%.

Taking into consideration recorded growth rate, 10.9%, of the first half and calculating it with the predicted growth of the second half, the BOK has predicted the annual projected growth at 8.9%. The current projection is higher than the 8% projected by the Ministry of Finance and Economy, and higher than BOK`s own projection of 7.2% made at the end of last year.

The BOK further projected domestic consumer spending increase at 7.3%, the expansion investment growth at 23.8%. The BOK even projected a bright outlook for the construction industry`s growth which recorded a -5.3% in the first half of the year. The BOK predicts a growth in the construction industry at 8.3%.

On the other hand, while the export is expected to continue to increase, the impact of the slow growth in the American economy will have a detrimental effect, and along with the increase of 22.3% imported goods, the account surplus is expected to be at $9 billion, lower than the earlier expected surplus of $10-12 billion.

As for consumer price index, with the proposed increase in the public utilities and minimum wage, the expected consumer spending is expected to reach 2.8% for the second half of this year.

Hyunjin Park witness@donga.com