2015 Macroeconomic Outlook
|Author||Economic Analysis and Forecasting Analysis||Date||2014.11.27||Issue No||602|
The Korean economy is expected to grow around 3.7%, a rate that has slightly increased from 2014, because of the export increase caused by moderate recovery of the global economy, and the recovery of domestic demand resulting from the government’s economic stimulus package.
● Both exports and the domestic demand are expected to grow relatively evenly and maintain similar growth trends in the first and the second halves.
●The rise in growth rates would be minimal compared to the previous year due to the slow growth of the global economy, as high uncertainty and the burden of household debt still abound.
●External risk factors such asthe effect of US exit strategy, slowdown of the Chinese economy, sluggish Eurozone countries and geopolitical volatility, are major variables, while downside risks are prospected to remain
Private consumption is expected to increase more from the previous year because of the government’s expansionary fiscal policy, improved real purchasing power thanks to stable prices, and the rise in employment.
Plant and equipment investment is anticipated to record an increase of approximately 5.5% propelled mainly by the automotive and semiconductor sectors, a result of increase in exports and the government’s economic stimulus measures. Construction investment is expected to grow around 2.8% owing to the rise in the government’s SOC budget.
Exports are projected to grow around 4.5%, a slight rise compared to the previous year. Contributing factors are , the slow recovery of the global economy, slowdown of the Chinese economy and intensifying competition with Japan caused by the low yen.
●Imports are expected to grow around 6%, which is slightly higher than the rate of exports, thanks to the moderate recovery of thedomestic economy whereas the trade balance is prospected to record $38 billion, a minimal decrease compared to the previous year.