South Korea lowers growth forecast for 2016
The country’s Ministry of Strategy and Finance reported that private consumption is expected to contribute to next year’s growth, expanding by 2.4% owing to record low interest rates and plunging crude oil prices. Facility investment is forecasted to climb 4.4% next year.
Exports will be offset by uncertainties in the global economy stemming from the US Fed’s possible rate hike in December while domestic demand will also weaken due to an aging population and growing household debts, according to the ministry. Exports are expected to increase 2.1% in 2016 while imports are forecast to post a larger increase of 2.6%, bringing current account surplus expectations to $98 billion from an earlier estimate of $88 billion.
For 2017, meanwhile, the ministry expects to see a growth rate of 2.7%, down from its previous estimate of 3.1%.
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