Optimistic outlook hampering economic policy
By Yoon Ja-youngThe country is accustomed to seeing government and economic think tanks lower their economic growth forecasts, but this custom is hampering the right economic policies, according to LG Economic Research Institute (LGERI).In June, the Ministry of Strategy and Finance lowered its economic growth outlook to 3.1 percent from 3.8 percent. More recently, Minister Choi Kyung-hwan said even the 3.1 percent growth seems to be hard to achieve.LGERI economist Lee Geun-tae pointed out that the actual economic growth rates have been falling below forecasts of both domestic and overseas institutes since 2011. The country’s five major economic think tanks, including LG, expected the economy to mark on average 3.7 percent annual growth between 2011 and 2014, but the actual growth rate stood at a mere 3 percent.Of course, there were unanticipated economic shocks that expanded this gap. Lee cited the earthquake in Japan, the Arab Spring, the tragic sinking of the Sewol ferry and an outbreak of Middle East Respiratory Syndrome (MERS) as external shocks that were impossible to fore
