Korea’s inflation to be highest among advanced countries

By Kang Seung-woo

Korea’s consumer prices are expected to rise at the steepest pace among the word’s advanced countries from 2012 onwards, the International Monetary Fund (IMF) said Monday.

In its global economic outlook report, the IMF forecast that the nation’s consumer prices will grow 3 percent in each of the four years from 2012 to 2015, the highest inflation rate among the 33 members of the Organization for Economic Cooperation and Development (OECD).

Consumer prices of most developed countries are expected to climb between the mid-1 to 2 percent during the same period.

The IMF expects Korea’s consumer prices to be the third highest this year and next, with forecasts of 3.1 percent and 3.4 percent, respectively.

A rapid rise in consumer prices is likely to pose a threat to the economic recovery since growing inflation dampens consumer spending and facilities investment.

The Washington-based organization said that Korea’s per capita gross domestic product (GDP) is likely to reach $20,164 this year, but will fall short of the government’s target of $30,000 in 2015, recording just $27,065.

The per capita GDP for 2010 will be 29th among the 33 countries cited in the report, ahead of the Czech Republic, Malta, Taiwan and Slovakia and the ranking will be maintained until 2015.

Japan’s its per capita GDP will be $39,740 this year, and will surpass the $50,000 mark reaching $51,662 in 2015.

Meanwhile, Korea’s GDP is expected to break the $1 trillion mark for the first time in 2011, reaching $1.05 trillion, and will touch $1.3 trillion in 2015. Korea’s trade surplus is expected to stay in the $20 billion to $30 billion range for the next five years, the IMF said.

The country’s real GDP growth will slow to 4.5 percent in 2011 and stay at the 4 percent level for the next four years from this year’s prediction of 6. 1 percent.