BOK: Economy to grow 6-7% in second half

Due to the rise in international oil prices, trade terms have deteriorated to their worst state ever, and this is hurting the Korean economy and the public`s purchasing power.

Nonetheless, the government forecasts 6-7% economic growth in the second half following the 11.1% posted in the first quarter in terms of GDP.

According to a second quarter (April-June) estimate of people`s income announced by the BOK, the real GNI, which indicates the purchasing power of people¡¯s income, was 99.96 trillion won in the second quarter, an increase of 1.8%. This is significantly lower than the real GDP growth of 9.6%.

When seasonal factors are excluded, negative growth of 3.1% was posted, indicating that purchasing power has declined.

Purchasing power also contracted in the first quarter by falling 0.5% compared to the fourth quarter of 1999.

An official from BOK revealed that the peoples¡¯ hard-earned wealth is flowing to oil-producing nations and said this phenomenon will continue.

Because of the soaring oil import unit price, the trade terms index, which shows the amount that can be imported with a specified unit of exports, fell to 72.6, its lowest level since the 1970s. During this period, in terms of won, the export unit price declined 2.8% while the import unit price rose 10.8%.