KIET: Economy to grow by 4.3% this year

The Korea Institute for Industrial Economics and Trade (KIET) predicted Thursday that the nation will record a 4.3 percent growth in real gross domestic product (GDP) and $10.7 billion in trade surplus. Last December, the institute forecast a 5.9 percent growth in GDP and $8.7 billion in trade surplus for this year.

KIET predicted that a variety of economic indexes will deteriorate somewhat this year under the influence of U.S. and Japanese economic slumps and the slowdown of the world’s economic growth rate.

According to KIET`s 2001 economic outlook, GNP would grow only by 3.9 percent in the first half of this year due to sharp drops in facility investments and exports, but the figure will climb to 4.6 percent in the second half thanks to the U.S. economic recovery to average 4.3 percent for this year.

``It is hard to say for sure when the economy will bottom out, but chances are high that it will be the fourth quarter of this year or the first of next year, given that an economic contraction lasted for 17 months on average from 1980 until 1997,``said a KIET official.

Based on the projection, the institute advised that the government should set up short-term policies like restructuring, investment promotion and export drive while in the long term, implement policies to secure a autogenous power for economic recovery and growth through continuous restructuring.

Yonhap