GDP rate seen low again in 2019Korea’s economy is expected to grow in the mid-2 percent range in 2019 as exports, private consumption and construction-related investments are expected to take a hit, according to a poll of the heads of local think tanks Sunday.
The Yonhap News Agency survey of seven leading economists - such as Choi Jeong-pyo, president of the Korea Development Institute (KDI), and Chang Ji-sang, head of the Korea Institute for Industrial Economics and Trade (KIET) - yielded growth predictions ranging from as high as 2.7 percent to as low as 2.4 percent, with most bracing for a slowdown in GDP growth compared with 2018.
The Finance Ministry is maintaining its 2018 growth outlook at 2.9 percent, although the Bank of Korea has trimmed its target to 2.7 percent.
Others surveyed were Sohn Sang-ho, president of the Korea Institute of Finance; Lee Dong-geun, head of Hyundai Research Institute; Kwon Tae-shin of the Korea Economic Research Institute (KERI); and acting director of the Institute for the Future of State Kim Do-hoon.
KDI’s Choi said that while outbound shipments are expected to slow, the country’s GDP may advance 2.6 percent year-on-year, just shy of the country’s potential growth rate of 2.7 to 2.8 percent.
The KERI chief said the economy has already entered a downward cycle, with growth falling as low as 2.4 percent due to weaker exports and consumption restricting gains overall.
Other research institute heads said that while exports are estimated to have expanded by some 6 percent in 2018, numbers will likely fall to the 2 to 3 percent range in the new year, mainly due to the slowdown in the global economy and the fall in prices of semiconductors and refined petroleum products.
On the domestic front, the research institute chiefs said investment in construction will fall for the second year straight.
On the plus side, KIET’s Chang said there are signs of recovery in the country’s shipbuilding sector, while Lee, who heads one of the largest private research organizations, forecast a rebound in facility investment.
“While facility investment has fared badly, this may change in the new year with the government putting emphasis on innovative growth,” the former government policymaker said.
In terms of private consumption, think tanks expect growth ranging from 2.4 percent to 2.6 percent, which is lower than the 2.8 percent growth target set by Seoul for the year.
The experts said upwards of 125,000 positions may be created in the new year, which is slightly better than 103,000 added to the job force for this year through November.