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State think tank cuts growth forecast to 3.6 pct

All Headlines 12:00 May 20, 2012

SEOUL, May 20 (Yonhap) -- The state-run Korea Development Institute (KDI) lowered its forecast of South Korea's economic growth for this year to 3.6 percent on Sunday, citing global economic uncertainties.

The latest projection is down from the 3.8 percent made by the KDI in November and lower than the government's estimate of 3.7 percent. The think tank also predicted the country's economic growth to rise to 4.1 percent next year.

"The South Korean economy has been stuck in a slowdown since the second half of last year due to weakened domestic and overseas demand stemming from global economic uncertainties," the KDI said.

However, Asia's fourth-largest economy is expected to post solid recovery from the latter half of this year, with the growth rate rising to the 4 percent range next year thanks to a gradual global economic recovery, it said.

According to the KDI, South Korea's exports are predicted to expand 3.6 percent on-year in 2012, a pace similar to that of last year.

Private consumption will likely to increase 2.7 percent this year from a year earlier, backed by greater corporate employment and a slowdown in the rise of crude prices.

Corporate capital spending is expected to increase 8.1 percent in 2012 on reduced economic uncertainties at home and abroad, and a low base of comparison last year.

South Korea's trade surplus will likely reach US$18.3 billion this year, with consumer prices forecast to rise 2.5 percent on-year.

The country's jobless rate is predicted to stand at 3.4 percent this year, with the figure likely to fall to 3.3 percent next year, according to the think tank.

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