Think tank cuts 2009 economic growth forecast to 1.7 pct

SEOUL, Dec. 22 (Yonhap) -- The South Korean economy is expected to grow a mere
1.7 percent in 2009 due to falling exports, a private think tank predicted
Monday, halving its earlier estimate of 3.4 percent.

In its latest report on the economy, the Korea Institute of Finance (KIF) said
the nation's gross domestic product is projected to grow 0.2 percent in the first
half of next year and 3.2 percent in the second half.
KIF's revised projection is the lowest among predictions made by domestic
institutions. Last week, the Ministry of Planning and Finance predicted the
economy will likely grow 3 percent next year. Early this month, the Bank of
Korea, the central bank, projected the economy is likely to expand 2 percent.
According to the report, exports, the main growth engine for the country, will
likely fall 6.9 percent on-year in 2009, but imports are expected to sink 13
percent, resulting in a current account surplus of US$19.5 billion.
Consumer spending is likely to grow only 0.3 percent with corporate spending on
facilities shrinking 1.5 percent due to the global economic slowdown.
With both exports and private consumption slumping, around 20,000 new jobs are
expected to be created next year, far short of the government's goal of about
100,000.
The nation's consumer inflation is likely to hover around 3.1 percent with the
key interest rate expected to be cut to 2 percent in the first half of next year
from the current 3 percent, the KIF said.
pbr@yna.co.kr
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