GDP growth for 2011 to be stunted to 4%

By Kang Seung-woo

Korea’s economic growth is expected to fall to as low as 4 percent next year, due to the waning effect of stimulus measures and the base effect of this year’s better-than-expected performance, a government source said Monday.

According to the Ministry of Strategy and Finance and Bank of Korea (BOK), the gross domestic product (GDP) growth of this year is expected to surpass 6 percent, higher than the previous estimate of 5.8 percent, so the economic outlook for 2011 will be reduced to the mid 4 percent level in its announcement next month.

The government previously estimated that the economic growth will hover around 5 percent.

“If Korea can pull off growth of just zero percent in the fourth quarter, the new GDP target could be met,” a government official said.

“However, the stronger growth this year will make it hard for next year’s growth rate to reach the 5 percent level as previously forecast, because a gain in gross domestic product is calculated year-on-year.”

BOK Governor Kim Choong-soo has also come up with the same forecast for next year’s growth.