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South Korea's economy will rebound next year and exceed its potential growth rate in 2014 despite the toughened global economic conditions, the country's finance minister said Wednesday.
The outlooks provided by Finance Minister Bahk Jae-wan come a day after the Organization for Economic Cooperation and Development announced its latest growth projections for South Korea.
The OECD revised down its 2012 growth estimate for Korea from 3.3 percent to 2.2 percent. But it expected the growth will improve to 3.1 percent next year and to 4.4 percent in 2014, raising hopes that the economy could pick up steam fast over the next few years.
"As we expect the economy will enter its recovering mode in 2013 and likely post gains that exceed our potential growth rate, now we need to muster all our efforts to get over the current difficult situations," Bahk told a crisis management meeting.
The potential growth rate refers to the maximum possible rate at which an economy can expand without triggering inflation. According to the central bank, the potential growth rate of Asia's fourth-largest economy is estimated at an annual 3.7 percent as of this year.
Bahk admitted that the Korean economy is more vulnerable to external market conditions due to its heavy dependence on trade but pointed out that it has been relatively successful in defending itself from the recent global economic crisis situations.