IMF: Korean Economy to Grow 3.6 Pct. Next Year

The International Monetary Fund has significantly raised Korea’s economic growth forecast for this year and the next.

According to the fund’s World Economic Outlook released yesterday, Korea will see growth rise from negative one percent this year to 3.6 percent next year. Both figures are higher than what the fund predicted in July and in the fund’s annual meeting with the Korean government in August.

Based on the reports in July and October, Korea’s economic forecast is the highest among eleven major economies including those of the United States, Japan, Canada, the United Kingdom, France and China. As such, Korea is expected to make a fast recovery.

In addition, the fund raised its global economic growth forecast for this year to negative 1.1 percent and to 3.1 percent next year, up from its July forecasts.

The fund said, “Developed economies will fail to meet their potential growth rate next year and see continued growth in unemployment while emerging economies will maintain growth, but the regional gap will continue to grow.”

It also advised against early implementation of an exit strategy, saying, “The largest risk factor of the global economy will be stalled recovery, and if expansionary strategies are taken too early, it could have a negative influence on the global economy.”

“Developed economies need to maintain expansionary monetary policy for a while, but certain emerging economies showing fast recovery including Asia are likely to change their monetary policy earlier than developed economies.”

cha@donga.com