SEOUL, KOREA – LG Economic Research Institute (LG ERI) predicted that the Korean economy will grow by 3.4% - 2.8% in the first half and 3.9% in the second half in 2013 - with the recovery of the global economy in its ‘Korean economic outlook 2013’. The report says that the Korean economy will reach a 2.2% growth rate amidst sluggish domestic consumption and export this year. The stagnation, it says, has resulted from the Eurozone crisis and uncertainty within the global economy.
LG ERI says that, “The global economy next year will see slightly higher growth than this year and the shrinking global trade will recover to a certain extent. With consumer demand in advanced countries gradually resuming, exports of durable goods and relevant parts of Korean companies are expected to increase.”
The report predicts that the income of exporting companies will lead to capital investment and income increases will boost consumer purchasing power. The growth rate of private consumption reached 1.7% this year and will increase 1% to 2.7% next year.
The report pointed out that high consumer debt, aging issues, and the sluggish real estate business still remain challenges. “The Korean economy in 2013 will recover with the global economic condition improving. However, there is still a risk that the Korean economy will shrink because of various risk factors including the fiscal cliff in the U.S. and European financial crisis.”
