Roundup: S. Korea raises 2021 growth outlook to 4.2 pct

SEOUL, June 28– South Korea’s finance ministry on Monday raised the country’s economic growth outlook for 2021 by 1 percentage point to 4.2 percent amid the expected recovery in both the export and domestic demand. The real gross domestic product, adjusted for inflation, was expected to grow 4.2 percent this year, according to the Ministry of Economy and Finance.

SEOUL, June 28 (Xinhua) — South Korea’s finance ministry on Monday raised the country’s economic growth outlook for 2021 by 1 percentage point to 4.2 percent amid the expected recovery in both the export and domestic demand.

The real gross domestic product (GDP), adjusted for inflation, was expected to grow 4.2 percent this year, according to the Ministry of Economy and Finance. It was revised up from a growth estimate of 3.2 percent unveiled six months earlier.

Export, which takes up about half of the export-driven economy, was forecast to spike 18.5 percent to 607.5 billion U.S. dollars in 2021 compared to the prior year. Import was predicted to jump 22.4 percent to 572.5 billion dollars.

The country’s export kept rising for the seventh consecutive month through May on the back of the global demand recovery from the COVID-19 pandemic shock.

The outbound shipment surged 45.6 percent in May from a year earlier, logging the fastest expansion in around 32 years since August 1988.

Private consumption, another major growth engine of the economy, was projected to increase 2.8 percent this year amid the ongoing vaccination campaign and the expansionary fiscal policy.

In the latest tally, South Korea administered COVID-19 vaccines to 15,290,302 people, or 29.8 percent of the country’s total population, with over 4.6 million people fully vaccinated.

The government planned to moderate its social-distancing guideline in July, aiming to fully inoculate 70 percent of the population by the end of this year.

Helped by the export recovery, facility investment was forecast to soar 8.7 percent this year. Outlook for construction investment was set at 1.2 percent.

The number of jobs was expected to increase by 250,000 in 2021, after declining by 220,000 in the previous year. Outlook for this year’s hiring rate aged 15-64 was placed at 66.4 percent.

Forecast for current account surplus was set at 77 billion U.S. dollars, and consumer price was predicted to increase by 1.8 percent this year.

The ministry forecast that the South Korean economy would grow 3.0 percent in 2022 amid the continued trend of economic recovery.

Export and import were expected to rise 3.8 percent and 3.0 percent each next year, and outlook for current account surplus was set at 66 billion dollars.

Consumer spending was predicted to rebound 3.5 percent next year, and facility and construction investments were projected to gain 3.0 percent and 2.8 percent respectively.

The employment was forecast to climb 250,000 in 2022, and outlook for consumer price inflation was placed at 1.4 percent.

Unlike the expansionary fiscal policy to bolster the recovery, the central bank indicated an orderly normalization of its accommodative monetary policy later this year amid a rising worry about the asset market bubble especially in the stock and real estate markets.

The Bank of Korea (BOK) has left its benchmark interest rate unchanged at a record low of 0.50 percent since May last year. Some of market watchers predicted a 25-basis-point rate hike as early as August. Enditem