Economy to expand 4.5% in 2011: KIET

Korea’s economic growth is expected to expand 4.5 percent on-year in 2011 as the steady pace of the global economic recovery contributes to more exports, a state-run think tank said Monday.

The forecast by the Korea Institute for Industrial Economics and Trade is up from its earlier prediction of 4.3 percent.

Last year, the Korean economy, Asia’s fourth-largest, expanded 6.2 percent.

“The economy will likely grow at a faster pace than previously anticipated, although it will not reach the number tallied for last year,” the think tank said.

“Growing downside risks including Europe’s debt crisis remain a source of concern, but exports are likely to jump around 20 percent on-year on unexpected factors like Japan’s March quake and an improving global economy.”

The KIET said the pace of export growth may fall off in the second half, but expected the country to post an annual trade surplus of $32 billion, higher than the government’s earlier target of $25 billion.

A rise in international commodities prices could cause imports to rise roughly 25 percent, it said. Prices of crude oil, natural gas and various raw materials have all gone up this year vis-a-vis 2010.

Semiconductor output is expected to jump 17.9 percent in 2011 from a year earlier, with production of the information technology and steel sectors gaining 13.7 percent and 13.1 percent, respectively.

Exports of 10 key industrial products will likely grow at an average rate of 16.1 percent this year with steel, petrochemicals, general machinery and autos expanding more than 20 percent on-year, the think tank said.

“The trade surplus from the 10 key products that play a vital role in South Korea’s economic growth is expected to top $114.8 billion in the second half, with total outbound shipments likely to hit $227.1 billion,” the KIET said. 

(Yonhap News)