Private think tank cuts Korea’s growth estimate

South Korea’s economic growth rate for 2012 is expected to slow to 2.5 percent from an earlier estimate of 3 percent due to a global economic slowdown, a private think tank said Sunday.

The growth projection by the LG Economic Research Institute is much lower than the government’s 3.3 percent estimate. The central Bank of Korea expects the economy to expand 3 percent this year.

The LGERI also said the South Korean economy, Asia’s fourth-largest, will likely expand 3.3 percent next year without entering a full-fledged recovery phase.

“South Korea’s growth rate is dropping at a faster rate than other major economies, with its full-year expansion reaching 2.5 percent this year” said the think tank affiliated with LG Group, one of the leading conglomerates in the country.

South Korean exports, the driver of the country’s economic growth, have been hit hard by a global economic slump stemming from the eurozone debt crisis and fiscal belt-tightening in advanced economies, it said.

“The second-half growth rate is likely to be similar to that for the first half thanks to the government’s latest stimulus plan and the easing of the world economy’s downturn in the fourth quarter,” the LGERI said. (Yonhap News)