EDITORIAL from Korea Herald on Dec. 10)

Growth rate game

The global and domestic economic outlook is extremely bleak and economists are
having difficulty forecasting how the nation's economy will perform next year.
The situation is changing so fast that they have not even concluded whether the
economy will grow or shrink.
It is better for government planners to have a specific growth rate in hand in
order to plan for as much spending for the coming year as is feasible. Public and
private organizations would also adjust their operational plans with percentage
numbers provided by reliable sources. Average households can refer to the numbers
in predicting the general mode of their and their neighbors' economic life,
possibly making or giving up plans for replacing the car, traveling overseas or
decorating their homes.
Yet, with three weeks to go to the end of 2008, we see a wide gap in the
forecasts of the economic growth rate for 2009, with the difference fluctuating
as large as some 6 percentage points. Finance Minister Kang Man-soo and Knowledge
Economy Minister Lee Youn-ho seem to be holding on to a 3 percent growth, 1
percentage point down from a month ago, while the Financial Services Commission
put the best possible rate at 2 percent. The Bank of Korea, which had predicted a
4.7 percent growth in July, will produce its own figure later this week.
Meanwhile, seven major international investment banks offered an average of 1.2
percent GDP growth for South Korea, with Goldman Sachs giving the highest, at 3.1
percent, against the grimmest prediction by Switzerland-based USB of minus 3
percent.
By now, President Lee Myung-bak's campaign slogan of "Victory 7-4-7" which
includes a 7 percent growth rate has become a fantasy, or a joke, but he is not
to blame. Only the cacophonous predictions and premonitions from various offices
of the 10-month-old government is a little disappointing, but they can also be
excused considering the harshness of external factors. The nation should simply
brace itself for the challenges of 2009 without paying too much attention to the
ever-changing "growth rate."
(END)