Think tank revises down growth forecast for Korea

Think tank revises down growth forecast for Korea
Date: April 06, 2008 (Korea.net)

A private think tank Sunday (Apr. 6) revised down its 2008 growth forecast for the Korean economy, citing rising oil and commodity prices and widespread concerns over a slowdown in global economy.

The Korea Economic Research Institute (KERI) forecast that the Korean economy will expand 4.5 percent this year, compared with its December projection of 5.1 percent.

The latest prediction is in line with those of many other private think tanks, which put their growth projections in the 5-percent range. It is, however, far below the government’s target of some 6 percent growth. Korea’s economy grew 5 percent last year.

The institute cited mounting concerns over global economic slowdown, rising crude oil and commodity prices as reasons for its decision to downgrade the growth target for Asia’s fourth-largest economy.

The institute also forecast that the nation’s consumer prices will rise 4.5 percent this year, up from its earlier projection of 3.4 percent on hikes in raw material prices and a weak local currency against the U.S. dollar.

According to government statistics, Korea’s consumer prices rose 3.9 percent in March, breaching the central bank’s target range of 2.5 percent to 3.5 percent for a fourth consecutive month. The Finance Ministry currently aims to keep the rate at 3.3 percent for this year.