Posted by: Ihlwan Moon on December 12, 2009
There’s a growing consensus among economists that South Korea is well on its way to returning to health. The Bank of Korea, the central bank, projected on Friday the country’s GDP will grow 4.6% in 2010, faster than its July projection of 3.6%, and up from an estimated gain of 0.2% this year. The bank said the pace of expansion is expected to accelerate to 4.8% in 2011 in line with a pickup in the global economy.
Earlier in the week, the International Monetary Fund also revised upward its forecast for Korea’s 2010 economic growth to 4.5% from its October projection of 3.6%, saying the country’s expansion will exceed all but China and India among the world’s 15 largest economies over the next couple of years. “Given poor performance in the first half of this year, next year won’t represent the full return to normalcy (for the Korean economy) but we could probably say so for 2011,” says economist Kim Hyeon Wook at Korea Development Institute, a government-funded think tank.
The optimism about the export-reliant Korean economy indicates that Korean companies will stay competitive in export markets even if the country’s currency continues to strengthen, as is widely expected. The Korean won has gained 8.2% so far this year and many foreign exchange traders say it could gain a further 10% by the end of next year.