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South Korea's Growth Will Exceed Forecast, Kwon Says
Real estate news By Seyoon Kim and Kim Kyoungwha
October 11, 2007 00:54 EDT
South Korea's 2007 economic expansion is likely to exceed forecasts as export growth accelerates and domestic demand rises, both the finance minister and central bank governor said. Growth this year will be ``more than the 4.6 percent estimate made in July,'' Finance Minister Kwon Okyu said in a speech prepared for a press briefing in Gwacheon. ``Next year, economic growth of about 5 percent is likely to be achievable.''
The higher forecast illustrates Kwon's confidence that South Korea's economy will withstand a housing-led slowdown in the U.S. as it focuses on exports to faster-growing markets. The Bank of Korea kept its benchmark interest rate unchanged at a six-year high today, saying inflation is stable. ``South Korea is benefiting from diversifying its exports to growing markets like China, Europe, South America,'' said Kwon Young Sun, an economist at Lehman Brothers Holdings Inc. in Hong Kong. ``Rising export growth and a pickup in domestic demand are both helping boost economic growth.''
Lehman raised its estimate of South Korea's 2007 gross domestic product growth to 4.9 percent from 4.6 percent previously, he said. Bank of Korea Governor Lee Seong Tae predicted today that the economy would expand faster than the central bank's earlier 4.5 percent forecast. ``Exports continue to post robust growth and consumption is showing a steady increase,'' Lee told reporters in Seoul. ``We're seeing growth quickening from our original forecast. Growth this year will be between 4.5 percent and 5 percent.''
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