ID :
36158
Wed, 12/17/2008 - 17:44
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http://m.oananews.org//node/36158
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S. Korea`s economy forecast to grow 2.7 pct in 2009: OECD report
By Lee Joon-seung
SEOUL, Dec. 17 (Yonhap) -- South Korea's economy is forecast to edge up 2.7 percent in 2009 as the worldwide slump takes its toll on private spending and exports, the Organization for Economic Cooperation and Development (OECD) said Wednesday.
The Paris-based body said in its annual economic survey report that South Korea's
consumer spending may drop 1.1 percent year-on-year, with exports gaining 6.4
percent due to sluggish demand in both domestic and overseas markets.
The gross domestic product (GDP) increase is lower than the 3 percent gain
projected by Seoul earlier in the week and a sharp drop from the 5 percent growth
reached in 2007.
It also said that any recovery will be contingent on global economic conditions
and may not occur until well into the new year.
The OECD said that measures by the government to increase spending and implement
tax cuts will bolster the economy, but called for a strong fiscal position in the
mid-term to prepare for a rapidly aging population that can fuel welfare
spending.
On tax cuts, the OECD said cutting direct taxes is in line with worldwide trends,
although it pointed out that South Korea's value-added tax rate of 10 percent is
lower than the OECD average of 18 percent and should be adjusted to contribute to
state earnings.
It also urged South Korea, one of the OECD's 30 members, to take steps to enhance
transparency in taxation and policies. It also encouraged it to revamp labor
market flexibility to create a more investment-friendly environment.
Such steps could help attract more foreign direct investment, which is vital to
creating more jobs and raising the country's overall competitiveness, the OECD
said.
The OECD also said that overall weakness in the national economy next year may
likely push the unemployment rate up to 3.6 percent from 3.2 percent in 2008,
with consumer prices moving up 3.9 percent in the new year from the 5.0 percent
predicted for this year.
For this year, it forecast South Korea will pull off GDP growth of 4.2 percent,
with exports and consumer spending gaining 9.1 percent and 1.7 percent on-year,
respectively.
yonngong@yna.co.kr
(END)
SEOUL, Dec. 17 (Yonhap) -- South Korea's economy is forecast to edge up 2.7 percent in 2009 as the worldwide slump takes its toll on private spending and exports, the Organization for Economic Cooperation and Development (OECD) said Wednesday.
The Paris-based body said in its annual economic survey report that South Korea's
consumer spending may drop 1.1 percent year-on-year, with exports gaining 6.4
percent due to sluggish demand in both domestic and overseas markets.
The gross domestic product (GDP) increase is lower than the 3 percent gain
projected by Seoul earlier in the week and a sharp drop from the 5 percent growth
reached in 2007.
It also said that any recovery will be contingent on global economic conditions
and may not occur until well into the new year.
The OECD said that measures by the government to increase spending and implement
tax cuts will bolster the economy, but called for a strong fiscal position in the
mid-term to prepare for a rapidly aging population that can fuel welfare
spending.
On tax cuts, the OECD said cutting direct taxes is in line with worldwide trends,
although it pointed out that South Korea's value-added tax rate of 10 percent is
lower than the OECD average of 18 percent and should be adjusted to contribute to
state earnings.
It also urged South Korea, one of the OECD's 30 members, to take steps to enhance
transparency in taxation and policies. It also encouraged it to revamp labor
market flexibility to create a more investment-friendly environment.
Such steps could help attract more foreign direct investment, which is vital to
creating more jobs and raising the country's overall competitiveness, the OECD
said.
The OECD also said that overall weakness in the national economy next year may
likely push the unemployment rate up to 3.6 percent from 3.2 percent in 2008,
with consumer prices moving up 3.9 percent in the new year from the 5.0 percent
predicted for this year.
For this year, it forecast South Korea will pull off GDP growth of 4.2 percent,
with exports and consumer spending gaining 9.1 percent and 1.7 percent on-year,
respectively.
yonngong@yna.co.kr
(END)
