`Triple Three` for Next Year in Growth, Prices, Unemployment – 3 Percent Increase

Next year`s economic growth rate, price rate, and unemployment are projected to increase by three percent on the macro economic index, creating a `Triple Three` phenomenon. This will be an improvement from this year`s economic conditions with 2.5 percent growth rate, 4 percent increase in prices, 3.7 percent unemployment rate.

The current budget surplus, however, will experience a large decrease and is expected to stop at 3 – 6 billion dollars.

One high-ranking official in the Ministry of Finance and Economy announced on November 25, "Although next year`s economic growth rate is projected to be 3-4 percent, we will implement policies geared to stimulate the domestic economy, such as increased spending, in order to raise the rate above four percent."

"This year`s consumer price increase will stabilize at four percent and will fall further next year to three percent." predicted the official. The Korea Development Institute (KDI) also predicted that prices will remain at three percent as value and raw material prices will continue to maintain current rates and the demand side is not likely to place pressure on prices.

The Ministry of Finance and Economy also reported that despite current economic stagnation, increasing employment in the service and domestic sectors and spread of changing work conditions are stabilizing the unemployment rate and are likely to continue into the next year. In the 1-4th quarter (January – March), construction economy will fall due to the season and the increase in college graduates looking for work may raise the unemployment rate. 2-4the quarter (April – June) and after, however, the economy is likely to stabilize. The KDI projected next year`s unemployment rate to stay the same as this year`s 3.7 – 3.8 percent. It will be difficult to maintain the current balance as economic policies aimed to stimulate the domestic economy become implemented and international account balance is most likely to reduce in size.

Chan-Sun Hong hcs@donga.com