SEOUL, KOREA - The Korean economy is sinking low to the degree that its growth rate falls below that of the Japanese economy. For the past three years in a row, Korea has languished with a low growth rate even below the potential growth rate. In contrast, Japan is showing strong signs of recovery with two consecutive years of growth over and above the potential rate.
According to the Bank of Korea and the Bank of Japan on May 19, the Japanese economy's real GDP growth rate for the whole year of 2012 and the first quarter of this year was 2.0 percent and 0.9 percent, respectively. The Korean economy meanwhile performed the exactly same rate of growth last year and the first quarter. But the Bank of Korea set this year's growth forecast at 2.6 percent while the Japanese counterpart raised the forecast figure to 2.9 percent.
If these figures turn out correct as forecast, then Korea will be overtaken by Japan in terms of growth rate in 15 years after the 1998 Asian Financial Crisis when the Korean economy plummeted 5.7 percent while the Japanese economy contracted by relatively less punishing 2.0 percent.
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