Private economists predict downturn

The nation's gloomy economic outlook for next year is being painted by private research institutes, one after another. They forecast that the economic growth rate will be sharply decreased from 8 percent this year to 5 percent next year and that the current account surplus drastically reduced at the same time.

Some institutes even forecast that the current account surplus, which decisively contributed for the nation¡¯s emergence from the International Monetary Fund bailout program, would register deficits next year.

There are some disparities among the research institutes regarding their economic outlooks, but their general consensus is that an economic slowdown due to reduced demand would begin and that the ordinary account surplus would dip with the sustained high oil prices.

Issuing an economic forecast for 2001 on Sunday, the Hyundai Economic Research Institute put forward two scenarios.

The first scenario estimates the nation's economic growth rate at 5.5 percent next year, down from the projected 8 percent for the current year. The institute also predicted that the next year's current account surplus would end up with US$2 billion and that the consumer commodity price inflation would reach 3.5 percent.

The institute attributed its projections to a slowdown in consumption and facility investments and meager recovery of construction, leading to an overall economic downturn. Although the current account¡¯s positive trend will be maintained for a considerable period, the current account surplus will decline for the coming three consecutive years due to the hikes in prices for oil and imported materials, the institute said.