SEOUL, KOREA - The Organization for Economic Cooperation and Development, or OECD, said on May 29 that Korea's economy is forecast to grow 2.6 percent this year, lowering earlier forecast of 3.1 percent by 0.5 percentage point. Its 2014 growth outlook was also slashed to 4.0 percent from 4.4 percent, at a level similar to the Korean government's growth projection.
The OECD forecast that the Korean economy is likely to make a "gradual" recovery in 2013 and 2014 following a slump in 2012 when it grew just 2 percent from a year earlier. Global economic situations were still cited as a major risk factor confronting the export-driven Korean economy. High household debt was also cited as another burden that could weigh on the economy as it could undercut spending in the private sector.
"The economy faces both external and domestic risks. With exports accounting for more than half of the GDP, Korea is particularly exposed to global economic conditions and exchange rate shifts," the OECD said in a report.
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