South Korea’s Economy to Grow 2.3 Percent in 2017: Think Tanks

Seoul, South Korea's major think thanks on Sunday predicted the country's economy may grow in the low 2 percent range next year, citing a global trade slowdown and faltering domestic consumption amid political uncertainties at home.

For 2017, the growth outlook stood at an average 2.3 percent, according to a survey on major private and state-run think tanks and research centers conducted by South Korean Yonhap News Agency.

The Korea Development Institute (KDI) forecast that Asia's fourth-largest economy will expand 2.4 percent next year from a year earlier, down from the 3 percent growth it predicted in May.

"Our economy's growth outlook is expected to reach 2.4 percent, below this year estimate," said KDI President Kim Joon-kyung. "Uncertainties surrounding the United States have expanded, and there is possibility of sluggish domestic consumption." There have been mounting concerns that U.S. President-elect Donald Trump's looming protectionist policies could curb South Korean exports.

The Korea Institute for International Economic Policy (KIEP) forecast the local economy's recovery momentum will be weakened in the face of still sluggish exports and domestic demand.

"The growth outlook for next is expected to be somewhere around 2.5 percent," said KIEP President Hyun Jeong-take, adding that under the new U.S. administration, the country could raise its key interest rate.

The Korea Institute for Industrial Economics and Trade (KIET) said the South Korean economy will likely expand 2.5 percent next year as a drop in domestic demand and investment will weigh heavily on the local economy.

"The 2017 economy will grow an estimated 2.5 percent as a slight recovery in exports will be offset by a slowdown in construction investment and private consumption," said KIET President Yoo Byung-kyoo.

The KIET said a boom in the local real estate market led by the Seoul government's deregulation drive has contributed to propping up Asia's fourth-largest economy throughout this year, which has been suffering from faltering exports and flaccid consumption.

Kwon Tae-shin, chairman of the Korea Economic Research Institute, meanwhile, forecast the South Korean economy will grow 2.2 percent annually next year.

The Korean Economic Association also put the 2017 growth outlook at somewhere around 2 percent due to the sluggish consumption.

"Next year will not show an improvement over this year," said Cho Jang-ok, chief of the association, further forecasting that the annual growth could even fall below the 2 percent mark.

The outlook by local think tanks came after the recent report by the Organization for Economic Cooperation and Development (OECD) indicated slower growth for South Korea in the new year.

Source: Qatar news Agency