Nearly three-fourths of local economic experts expect South Korea’s economic growth to remain stuck in a low range over the long term amid overseas risks, a poll showed Tuesday. (Image courtesy of Yonhap)
SEOUL, Dec. 12 (Korea Bizwire) — Nearly three-fourths of local economic experts expect South Korea’s economic growth to remain stuck in a low range over the long term amid overseas risks, a poll showed Tuesday.
The survey of 211 professors of economics and business administration showed 73.2 percent of the respondents predict the economy to grow 1 to 2 percent for a long period of time.
Some 14 percent of those surveyed forecast the growth rate of Asia’s fourth-largest economy to enter the 2-percent range next year before rising to an average in the 3 percent band from 2025, the survey commissioned by the Korea Enterprises Federation showed.
Eleven percent replied the economy’s growth rate would temporarily bounce back to the 3 percent range but soon drop to the 1-2 percent band.
A mere 1.4 percent said the economy will likely perk up fast and grow in the 3 percent range from next year.
The gloomy outlook comes as Asia’s fourth-largest economy has been hit hard by plunging exports and sluggish domestic demand this year.
The central Bank of Korea (BOK) has recently projected the economy to grow 1.4 percent for all of 2023, down from a 2.6 percent expansion in 2022.
According to the findings, slightly over half of the respondents cite global political and economic risks like the Israel-Hamas conflict, the war in Ukraine, the U.S.-China race for global supremacy and high inflation.
About 33 percent expect South Korea’s currency to firm up against the U.S. dollar in the second half of next year, with another 31 percent picking 2025.
Some 72 percent forecast South Korea’s consumer inflation rate to reach the government target rate of 2 percent in the second half of 2024 or 2025, with only 7.6 percent expecting consumer inflation to fall to the 2 percent range in the first half of next year.
In November, consumer prices rose 3.3 percent from a year earlier amid high prices of energy and farm goods, staying above 3 percent for the fourth consecutive month.
Slightly over 61 percent of the respondents said the central bank should hold interest rates for the time being amid a slowing economy, with 25.6 percent saying it should hike rates. Only 13.3 percent answered the country’s benchmark interest rate should be cut.
In a widely expected move, the BOK kept the benchmark seven-day repo rate unchanged at 3.5 percent on Nov. 30, holding it for the seventh straight time amid domestic and overseas negatives.
(Yonhap)
