S. Korea predicts lower 2023 GDP growth, vows to support export

A currency trader passes by screens showing the Korea Composite Stock Price Index (left) and the exchange rate of South Korean won against the US dollar at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea on Dec 6, 2022.
(AHN YOUNG-JOON / AP)

SEOUL – South Korea's economic growth next year will slow to 1.6 percent from an estimated 2.5 percent this year as the world economy loses momentum and pent-up domestic consumption after COVID-19 curbs were lifted fades, the finance ministry said on Wednesday.

The finance ministry of South Korea said exports would fall 4.5 percent next year, reversing a 6.6 percent gain in 2022, but said it would provide a wide range of support for export industries to minimise the magnitude of the export decline

That would be less than the average 2.3 percent growth posted during the last five years by Asia's fourth-largest economy, which is home to major global suppliers of items ranging from cars and ships to computer chips and industrial machinery.

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"The effects from sluggish global trade and fast interest rate increases will likely limit the growth momentum for our economy across the board," the ministry said in a policy statement, adding growth has already begun slowing in the current quarter.

It is the first full-year economic blueprint for President Yoon Suk-yeol's administration since its launch in May. Yoon has recently said his government would focus policy support on reviving the economy by boosting exports.

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The ministry said exports would fall 4.5 percent next year, reversing a 6.6 percent gain in 2022, but said it would provide a wide range of support for export industries to minimise the magnitude of the export decline.

It said inflation would slow to 3.5 percent in 2023 after hitting 5.1percent this year, the fastest since 1998 while the country was suffering from the impact from the Asia financial crisis.