State-run think tank maintains growth forecast for this year

Construction site in Seoul South Korea Yonhap — Construction workers are seen at an identified location in Seoul, in this undated photo. Yonhap

SEOUL, August 13 (AJP) - The state-run Korea Development Institute on Tuesday decided to keep the country's growth forecast for this year unchanged at 0.8 percent.

The figure remains the same as the think tank's previous forecast in May, despite the government's series of measures including a 30 trillion won supplementary budget and cash vouchers handed out to all South Koreans to boost consumption.

KDI estimated private consumption will rise by just 0.2 percentage points to 1.3 percent thanks to the government's stimulus measures, but the overall effect is expected to be minimal.

Citing the prolonged slump in the construction sector as one of the reasons for its latest forecast, it projected that relevant investment is now likely to decline by 8.1 percent, down from 3.9 percent in its earlier projection.

As economic uncertainties have somewhat eased after the country's recent tariff-related deal with the U.S. was reached late last month, the growth outlook for exports was revised to 2.1 percent, up by 1.8 percentage points.

KDI's latest forecast is in line with projections from the Bank of Korea (BOK), as well as other major foreign financial institutions such as the International Monetary Fund (IMF) and the Asian Development Bank (ADB).

Candice Kim candicekim1121@ajupress.com