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The OECD has forecast that the growth rate of the Korean economy will be the highest among OECD countries, although it lowered the rate for this year.
According to an economic outlook recently released by the OECD , the forecast economic growth rate for Korea stood at 2.6 percent, which is a decrease from last November’s 3.1 percent, but still the highest among OECD countries.
The OECD also revised the average growth rate of member states downward from 1.4 percent to 1.2 percent, and that of the global economy from 3.4 percent to 3.1 percent.
Korea’s expected growth rate was the highest and identical to that of Australia and New Zealand. The expected growth rate of Australia was lowered from 3.0 percent to 2.6 percent. The growth forecast for New Zealand rose from 2.4 percent to 2.6 percent.
Japan’s growth rate was forecast at 1.6 percent, a 0.9 percent point increase from 0.7 percent despite signs of economic recovery based on Abenomics. Forecast growth for the United States, Germany, and England was 1.9 percent, 0.4 percent and 0.8 percent, respectively. Korea’s growth rate was lower than that of China (7.8 percent) and India (5.3 percent), which are not OECD members.
Korea’s economic forecast for next year is even brighter. It is expected to exceed that of the United States (2.8 percent), Australia (3.2 percent), and New Zealand (3.1 percent) although the OECD revised it downward from 4.4 percent to 4.0 percent.
It is on the same level as the growth rate of the global economy, which is higher than the average of member countries by 1.7 percent.
An active economic stimulus package including a revised supplementary budget and lowered interest rate seem to have contributed to the OECD’s high expectations for the Korean economy.
However, according to the OECD, urgent issues include ensuring financial and fiscal capability for a sluggish global economy, organizational restructuring to improve the labor participation rate and enhancing productivity in the service sector.
An insider noted that the OECD’s recommendations are in line with the national agenda items of the new government, and added that being ranked 1st in the growth rate forecast will mean that the Park Geun-hye administration’s economic policies have been successful.
Source: Newsis (May 29, 2013)
** This article was translated from the Korean.