By Kim Jae-won
Staff Reporter

Local securities firms forecast the Korean economy will grow 4.4 percent next year, but cautioned that there are many barriers in the way.

According to latest reports by eight brokerage houses, their economic growth outlook averaged 4.4 percent for 2010, with growth forecasts ranging between 3.7 percent and 4.9 percent.

The eight are Hyundai Securities, Shinhan Investment, Tong Yang Securities, Daeshin Securities, Eugene Investment & Securities, Industrial Bank of Korea (IBK) Securities, Hanwha Securities and Hana Daetoo Securities.

Eugene and Tong Yang are the most optimistic, forecasting a 4.9 percent expansion, followed by Dashin (4.6 percent), IBK (4.5 percent), and Hyundai (4.5 percent).

Hanwha and Shinhan predicted that the nation’s gross domestic product (GDP) will grow less than 4 percent, reporting 3.7 and 3.9 percent, respectively.

Securities firms agreed that the GDP will sustain robust growth in the first half of next year, but the growth momentum will weaken in the second half.

They pointed out that expanded restocking from January to June will stimulate investment and consumption, and exports will increase from the second half on the back of the global economic recovery.

They added that the Chinese economy, which showed strong signs of recovery during the global crisis, will boost Korea’s growth. China, the third largest economy in the world, saw its GDP rise 8.9 percent in the third quarter.

``There are many good signs for next year. First of all, the government will keep their expansion policy, and exports will increase 19.4 percent next year compared to 2009,’’ Lee Chul-hee, chief economist of Tong Yang Securities, said.

``The Chinese economy which will grow 9 to 9.7 percent next year, will also contribute to the Korean economy,’’ Lee added.

However, some critics warned against hasty optimism, saying the Korean economy is still fragile because there are many obstacles, such as rising price of oil and commodities, and the spread of the H1N1 virus, which could curb growth.

In the meantime, the Organization for Economic Cooperation and Development predicted that the Korean economy will grow 4.4 percent earlier this month, while the Korea Development Institute (KDI), a state-run research center, recently asked the government to implement an exit strategy early saying Korean economy will grow 5.5 percent next year.

shosta@koreatimes.co.kr