Wed, Jan 30, 2013 - Page 15 News List

IMF to slash forecast for S Korean economic growth

Bloomberg

The IMF is likely to pare its forecast for South Korea’s economic growth for this year, catching up with reductions by the Bank of Korea and the South Korean Ministry of finance.

The full-year expansion may be about 3 percent, compared with a 3.9 percent estimate made in September last year, IMF mission chief for South Korea Hoe Ee-khor said in an interview in Seoul after meeting with South Korean officials last week. He did not say when a new estimate may be released.

Seoul is frontloading budget spending in the first half of this year to spur expansion as gains in the won and a slide in the Japanese yen threaten to crimp exports. Paring the forecast would bring the IMF closer to the central bank’s prediction of 2.8 percent growth and the ministry’s 3 percent estimate.

The won gained more than 21 percent against the yen in the past year, aiding Japanese exporters of cars and electronics that compete with South Korean companies. The won traded at 12.03 per yen as of 9:27am in Seoul yesterday.

Khor said Asia’s fourth-biggest economy remains “very strong” and is less vulnerable to shocks than in the past.

Growth was 1.5 percent lower in the fourth quarter from a year earlier, matching a third-quarter pace that was the slowest since 2009.

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