IMF: Korean Economy to Contract 4 Pct. This Year

The International Monetary Fund said yesterday that Korea will be the worst performer among the Group of 20 industrialized countries with minus growth of four percent this year.

The IMF predicted, however, said the country’s recovery will begin in the second half of the year and see growth of 4.2 percent next year, marking the fastest recovery in the world.

In its economic forecast by country, the Washington-based international lender significantly downgraded Korea’s growth outlook from the projection of two percent made in November last year.

The forecast said the first quarter will see a contraction of 5.1 percent, the second 5.9 percent, and the third 5.7 percent. The final quarter, however, is expected to see positive growth of 0.9 percent.

Asia’s four emerging economies of Korea, Singapore, Taiwan and Hong Kong are predicted to shrink 3.9 percent on average.

The IMF sharply slashed Korea’s growth outlook based on its projection of 0.5 percent growth for the global economy this year, the lowest since World War II, as well as Korea’s expected steep decline in exports and domestic consumption.

The outlook for next year was better, with the Korean economy expected to grow 4.2 percent, the fastest among G20 countries and the third highest after China (eight percent) and India (6.5 percent).

cha@donga.com