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S. Korean economy forecast to grow 1.9 pct in 2023: think tank

Economy 15:47 November 21, 2022

SEOUL, Nov. 21 (Yonhap) -- The South Korean economy is expected to expand 1.9 percent on-year in 2023 over aggressive monetary tightening policy by major economies and a global economic slowdown, a local think tank said Monday.

The Korea Institute for Industrial Economics & Trade (KIET) forecast South Korea's gross domestic product to expand 1.9 percent on-year next year, compared with its forecast for this year of 2.5 percent.

The estimate is lower than the government's forecast of 2.5 percent for next year and the Bank of Korea's projection of a 2.1 percent growth.

The institute pointed to such external factors as the ongoing war between Russia and Ukraine and monetary tightening by the United States and other nations, as well as high inflation and uncertainties in the financial market, as major factors that would weigh on the economy next year.

Domestic demand is projected to increase 2.5 percent in 2023, as high interest rates and slow wage growth amid high inflation would badly affect consumer sentiment, according to the KIET.

The country's exports would fall 3.1 percent on-year to come to US$671.7 billion due mainly to a down cycle of the chip industry and the global economic slowdown.

But imports are projected to fall 5.1 percent on-year to $698.3 billion in the new year, which could help narrow the country's trade deficit, the think tank said.

This file photo taken Nov. 11, 2022, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

This file photo taken Nov. 11, 2022, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

graceoh@yna.co.kr
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