IMF Lowers Korean Economic Growth Estimate to 3.8 Percent

The International Monetary Fund (IMF) cut its forecast for Korea’s economic growth rate to 3.8 percent from its April projection of 4.0 percent in its World Economy Outlook report released on Wednesday.

According to the report, the economic growth of countries like Korea, Singapore and Taiwan in the first half of this year was more sluggish than expected due to high oil prices and weak demand for home appliances, major export items of those economies. The IMF also slightly lowered next year’s prospect for Korean economic growth to 5.0 percent from 5.2 percent.

On the other hand, prospect for China’s growth rate in 2005, one of two economic pillars of the world with the U.S., was raised to 9.0 percent from 8.5 percent. Next year’s forecast also was increased from 8.0 percent to 8.2 percent.

The IMF expects the U.S. will keep leading the world’s economic growth by recording growth rates of 3.5 percent and 3.3 percent in 2005 and 2006, respectively. This projection is down by 0.2 percent and 0.3 percent from its April forecast.

The world economy grew by 30-year-high of 5.1 percent last year, but the rate will slow slightly to 4.3 percent for 2005 and 2006 according to IMF projections.

Jong sik Kong kong@donga.com