Korean economy to likely lose more ground in 2009

SEOUL, Sept. 28 (Yonhap) -- South Korea's economic growth rate may fall to the 3-percent range in 2009 as U.S. financial instability is highly likely to put a crimp in its exports, local think tanks said Sunday.

Consumer prices are expected to be more stable next year than in 2008, but the
price stability can't be considered positive because it will be the result of the
global economic slowdown, they said.
The LG Economic Research Institute, the research arm of LG Group, has left open
the possibility that the growth rate of the Korean economy, Asia's
fourth-largest, could drop to the low or mid 3-percent range in the coming year.
"It will be difficult for the Korean economy to make a recovery next year because
of a prolonged U.S. financial crisis," Oh Moon-seok, a senior economist at the
institute said. "The slowdown of the economy is accelerated."
The Bank of Korea (BOK), the nation's central bank, said it is readjusting its
economic growth forecast for next year in the wake of the recent U.S. financial
turmoil.
"Unlike our earlier estimate, there is the possibility that the economy might
move in a different direction," a BOK official said on condition of anonymity.
"We are taking stock of several variables."
The central bank had forecast that the Korean economy would grow 4.6 percent this
year and post a better performance in 2009.
The Korea Institute of Finance (KIF) said South Korea's economic growth rate will
likely reach around 4 percent next year, with the economy advancing in the
3-percent range in the first half and in the 4-percent range in the second half.
"Economic conditions are expected to be worse in the first half of next year than
this year, and the growth of exports is likely to slow down," said Shin
Yong-sang, a KIF researcher.
Other private economic think tanks, including Samsung Economic Research
Institute, said there is a high possibility of the nation's economic conditions
being aggravated in the coming year.
(END)