South Korea central bank trims 2012 GDP growth forecast to 3.5%

16 April 2012 10:08  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea is expected to grow at a slower rate of 3.5% this year, compared with a previous forecast of 3.7% amid the global slowdown and higher oil prices, the country's central bank said on Monday.

GDP growth is expected to accelerate to 4.2% in 2013, the Bank of Korea (BOK) said in a statement.

An easing of uncertainties over the eurozone sovereign debt crisis will be positive for economic growth, but the global slowdown and higher oil import prices will weigh down on the South Korean economy, it said.

“Export growth is forecast to slow somewhat, owing to the cooling of world trade growth as a result of the economic recession in the euro area,” the BOK said.

South Korea’s export growth is forecast to slow to 4.8% this year from a 10.5% pace in 2011, it said, citing an slower global economic growth of 3.4% from 3.9% last year, the central bank said.

Meanwhile, the import prices of oil are expected to increase to $118/bbl in 2012 from $108/bbl last year, it added.

South Korea is expected to post a higher current account surplus of $14.5bn (€11.2bn) from the previous forecast of $13bn, the BOK said. In 2011, South Korea posted a current account surplus of $26.5bn.

In 2013, the BOK forecasts a narrowing of the country’s current account surplus to around $12.5bn.

Current account measures an economy’s trade in goods, services, tourism and investment with the rest of the world.

($1 = €0.77)

By: Nurluqman Suratman

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