S. Korean economy forecast to grow 1.8 pct in 2009

SEOUL, Dec. 25 (Yonhap) -- The South Korean economy is expected to grow 1.8 percent in 2009 due to slumping exports and weak domestic demand, a private think tank said Thursday, halving its earlier growth forecast of 3.6 percent.

In its latest report on the economy, LG Economic Research Institute said the
nation's gross domestic product is likely to gain 0.3 percent in the first half
of next year and 3.2 percent in the second half.
"Next year's economic growth rate will likely hover in the upper 1-percent range
despite the government's massive stimulus package," it said.
Without the government's pump-priming measures, which will translate into 35.6
trillion won (US$27.1 billion), the economy could contract next year, it said,
adding the steps will likely help boost the growth rate by 1.01 percentage point.

The think tank's growth prediction is lower than estimates made by the government
and the central bank.
Last week, the Ministry of Strategy and Finance predicted the economy will likely
grow 3 percent next year. Early this month, the Bank of Korea projected the
economy to expand 2 percent.
According to the institute, exports -- the main growth engine of Asia's
fourth-largest economy -- are expected to fall 7.3 percent in 2009 from this
year, with imports likely to drop 10.9 percent on-year. The country is forecast
to post a current account surplus of $7.6 billion in the coming year.
Growth of private consumption is projected to decline to 0.9 percent in 2009 from
this year's 1.2 percent, and corporate spending will likely decrease 5 percent.
The nation's consumer inflation rate is estimated to reach 2.3 percent in 2009,
with the won-dollar exchange rate likely to hover around 1,100 won, the think
tank said.
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