SEOUL (XINHUA) – The South Korean government yesterday set its economic growth outlook for this year at a higher level than last year on expectations for export recovery.
Real gross domestic product (GDP), adjusted for inflation, was forecast to grow 2.2 per cent in 2024 after rising 1.4 per cent in the previous year, according to the Ministry of Economy and Finance.
The 2024 outlook was still lower than an increase of 2.6 per cent in 2022.
The outbound shipment was expected to rebound this year on the back of higher global trade and improved production activity in the global semiconductor sector, the ministry said.
Export, which accounts for about half of the export-driven economy, was predicted to pick up 8.5 per cent this year after diminishing 7.4 per cent last year.
Global trade was projected to increase 3.5 per cent in 2024 after going up 0.9 per cent in the previous year, according to the International Monetary Fund (IMF)’s forecast in October last year.
Global sales of memory chips were forecast to surge 44.9 per cent this year after plunging 31.0 per cent in the prior year, according to the World Semiconductor Trade Statistics (WSTS)’s outlook in November last year.
The outlook for the country’s current account surplus was placed at USD50 billion dollars in 2024, higher than a surplus of USD31 billion a year earlier.
The ministry said current account surplus would rapidly grow this year on export recovery that could offset higher service account deficit, affected by expected expansion in overseas travel.
Private consumption, another growth engine of the Asian economy, was forecast to gain 1.8 per cent in 2024 after increasing 1.8 per cent in 2023 and 4.1 per cent in 2022.
The prolongation of high interest rates and the still high inflation would restrict recovery in consumer spending, the ministry noted.
The country’s central bank had left its key rate unchanged at 3.50 per cent since January last year, after raising it by 3.0 percentage points for the past one and a half years.
Facility investment was projected to rebound 3.0 per cent this year, but investment in the construction industry was predicted to decline 1.2 per cent amid the faltering real estate market.
The number of jobs was expected to expand 230,000 in 2024 after climbing 320,000 in the previous year.
The outlook for the hiring rate among those aged 15 or older was set at 62.8 per cent in 2024, up 0.2 percentage points from a year earlier.
Forecast for consumer price inflation was put at 2.6 per cent in 2024, far lower than 3.6 per cent in 2023 and 5.1 per cent in 2022.
The ministry said inflationary pressure would be weakened this year on cheaper raw materials, but it noted that uncertainty remained such as geopolitical risks in Europe and the Middle East.
