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Macroeconomic Outlook on for 2013

Author Economic Analysis and Forecasting Division Date 2012.12.26 Issue No 546
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In 2013, South Korea’s domestic economy is expected to grow by 3.1%, or 1 percentage point higher than that of 2012. Contributing factors are the easing global economy, recovering exports, stable oil prices and rising domestic consumption.

 

- South Korea’s economy is projected to show a low growth amidst lingering uncertainty over the world economy and its ensuing slow growth.

 

- Recovery will become more palpable further into the year  2013. Thus, economic growth will remain low in the first two quarters, and relatively increase in the latter quarters, partly aided by the base effect of the previous year.

 

- Overall, downside risk factors are prevalent, while the euro crisis and South Korea’s individual debts might worsen the situation.

 

Despite the burgeoning debts, domestic consumption is likely to increase by 2 full percentage points,, propelled by better trade terms and purchasing power coming from stable oil prices and the rising value of the Korean won.

 

Investment in equipment is projected to increase by around 5% thanks to recovering exports and slightly easing uncertainty. Investment in construction will expectedly rise slightly from the regression of the previous two years, partly propelled by more investment in infrastructure by the government.

 

The easing world economy and recovery in the IT industry will propel more exports later into the year 2013 and national exports in general will grow about 5%.

 

The trade surplus in 2013 is projected to record a similar figure to that of last year, or 27 billion USD.