Korean Economy Growth to be 5.5 Percent

U.S. investment bank Goldman Sachs raised Korean economic growth estimate to 5.5 percent this year.

In the `report on the Asia-Pacific economy` Goldman Sachs announced on the 4th, it raised Korea`s economic growth estimate to 5.5 percent from 4.7 percent by saying, “facility investment will be recovered due to the expansion of domestic consumption and increasing exports. ”

According to the report, it forecasted that quarterly growth rate would be `4.6 percent →5.6 percent →5.8 percent →6.0 percent` with accelerated speed as time goes.

Goldman Sachs announced that `the growth rate in domestic demand, ` or the growth rate of domestic consumption, the developing engine of Korean economy, soared to 5.3 percent in the fourth quarter from 2.3 percent in the 3rd quarter, and kept upward trend till February this year.

The export, which leads the economic growth, bottomed out and turned the corner in the fourth quarter last year, and the export in March this year increased by 4 percent from a year earlier considering seasonal variation, said the report.

Seung-Ryun Kim srkim@donga.com