JP Morgan predicts over 3% growth

The Korean economy will likely grow more than 3 percent in 2013 from this year amid improving external and internal macro environments, JP Morgan said yesterday.

The U.S. investment bank predicted Korea’s real GDP will recover to the 3 percent level next year, compared to an estimated 2.3 percent in 2012, with exports set to rise and fiscal policy turning more supportive.

“On a quarterly basis, real GDP growth has slowed for three straight quarters since the first quarter of 2012, but demand side conditions now look aligned to support an improvement in manufacturing output, which should lift the overall GDP growth modestly starting this quarter,” JP Morgan said in a report.

“The key risks to our growth view are external demand, especially in developed market countries, and any possible policy interruptions after the presidential election in December,” it added. Accordingly, the country’s equity market is on a gradually rising trajectory toward 2013, JP Morgan said.

“Despite vulnerable movements over the progress of global risk aversion, we believe a gradual pace of the Korean won appreciation should remain intact in 2013, resulting in continuing foreign money inflow into the domestic credit and equity markets,” it said. “We believe the momentum dynamics of the Korean equity market will be greater in the second half of 2013.”

Yonhap