FKI forecasts slower economic growth for 2H

The Federation of Korean Industries (FKI) forecast on Thursday that the gross domestic product growth rate will reach 6.7% for the second half of this year, 10.9% lower than the first half, to record an annual growth rate of 8.7%. The FKI also predicted that consumer spending would likely drop from 10.1% in the first half to 6.6% in the second due to the sluggish stock market and consumer price insecurity. The investment on facilities is forecast to shrink from 46.8% in the first half to 26.4% for the second half.

The FKI also predicted imports would drop for the second half, pushing the trade surplus up to $5.5 billion from $4.4 billion dollars in the first half, to record an annual trade surplus of $9.7 billion. Consumer prices, which rose by 1.5% during the first half and remained stable, are likely to rise by 3.2% for the second half. Interest rates will most likely follow the suit and rise by a small percentage due to market insecurities.