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2014 Macroeconomic Outlook

Author Economic Analysis and Forecasting Division Date 2013.11.28 Issue No 569th

In 2014, domestic economy is expected to grow more or less than 3.7% which is close to the long-term trend growth rate, thanks to the expansion in the export caused by the lessened global slowdown, and the recovery in domestic demand resulting from the improvement in income and the terms of trade.    


● The external factors such as the effect of the U.S. exit strategy, the sluggish growth in China, the impact of the rise in consumption tax in Japan, and the internal factor including household debt, are prospected to act as variables.

● While downside risk is somewhat dominant across the board, the growth trend is likely to continue in the second half.


Private consumption is expected to grow 3% which is higher compared to the previous year, due to the rise in income resulting from the recovery in the export, and the improvement in the terms of trade caused by the stable oil price and decline in the exchange rate.


Facility investment is anticipated to increase more or less than 5% on an annual basis as it shows some signs of vibrant recovery, which is mainly led by IT manufacturing industry. It is because of the recovery in the export and eased uncertainty. Construction investment is prospected to undergo somewhat stagnant growth due to the cut in public infrastructure spending. 


Export is expected to grow 6.7 % on an annual basis which is higher compared to the previous years due to the lessened slowdown in global economy.


● Import is anticipated to grow more or less than 9% in accordance with the recovery in the export and domestic demand.


● When the import growth rate remains over the export growth rate, the trade balance would be in a positive territory, recording more or less than $33 billion which decreases compared to the previous year.