ADB Forecasts 4.6 Percent Economic Growth Rate for Korea

The Asian Development Bank (ADB) projects that Korea’s economy will grow by 4.6 percent this year in a report on economic outlooks released on Monday. This is a 0.1 percentage point rise from the projection of 4.5 percent announced this March. ADB also raised its outlook on the Korean economic growth rate for next year from 4.8 to 5.0 percent.

The ADB pointed to capital investment, domestic demand recovery, and rising exports as the reasons behind upping its Korean economic growth outlook. It also raised the economic growth projections for the Asian region as a whole (excluding Japan) from 7.6 to 8.3 percent, up by 0.7 percent from its forecast released half a year ago.

The Samsung Economic Research Institute (SERI) also released a rosier outlook on the Korean economy. It forecasts that the Korean economy will grow by 5.0 percent next year. Although the U.S. economic growth rate may jump down to the 2.0-percent range, the institution expected that continued economic growth in other regions will boost exports, which will lead to recoveries in domestic consumption.

In a Korean construction leaders’ forum held at the Intercontinental Hotel on Monday, Budget and Planning Minister Chang Byoung-wan said, “Next year, the Korean economy will post around a five percent growth rate in line with our potential growth rate.”

He added, “However, there are some risk-factors, such as a rise in international oil prices, a sluggish U.S. economy, and higher volatility in the global financial market. Given the uncertainties occurring from the recent sub-prime mortgage loan crisis in the U.S., we need sound risk management in order to minimize their impact on the real economy.”

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