KDI expected to grow “2.9% next year…Concentration toward semiconductor may cause negative result
[ Kwon Dae Gyung kwon213@ ] | 2017-12-07 10:10:45
The Korean economy is expected to grow around 3% next year, similar to this year. However, the fact that it relies heavily on semiconductors will be a big `risk`. Although the recent brisk export of semiconductors is driving the overall economy, the overall economy may worsen if prices fall in global markets or trade conditions deteriorate. It is pointed out that `sloping growth`, which is concentrated on semiconductors, can become a `poison` in our economy depending on the situation.
The Korea Development Institute (KDI), a national research institute on December 6, presented the economic growth forecast for the year and next year at 3.1% and 2.9%, respectively, in the `Economic Outlook for the second half of 2017`. Compared with the 2.6% and 2.5% suggested in April, it increased by 0.5 % point this year and 0.4 % point next year.
First, the KDI estimated that the world economy recovered smoothly due to the expansion of trade volume and economic improvement. Our economy has been affected by this, and we have seen that these aspects will evolve in the future. The core is the semiconductor. KDI explained that growth will continue as semiconductors will drive overall exports and industrial productivity for the time being. Actual exports were $ 49.67 billion last month, marking record highs in November. Exports contributed to GDP growth of 71.0% from 1Q09 to 3Q09, including the effect of value added.
However, KDI has warned that if semiconductor biases do not improve, it could face a bigger crisis. Income-driven growth in the current government has been effective on private consumption, but exports are unlikely to show robust growth.
The employment market is a fragmentary example. KDI predicted that the number of employed workers will increase from 300,000 to 300,000 next year. Employment is expected to get worse next year.
Meanwhile, according to the Korea International Trade Association`s (KITA), the number of semiconductors is about half of that of automobiles (230,000) and other manufacturing (200,000).
This is interpreted as the fact that export-oriented products such as semiconductors are supporting the whole economy but it is not a condition to continue to lead growth.
Kim Hyun-wook, director of the KDI Macroeconomic Research Division, stated, "Growth is largely due to the strong performance of semiconductors, which means that the competitiveness of the rest of the semiconductor industry is declining." If the price falls and the competitiveness of export- We can face a fall that goes beyond."
The KDI also attacked the Bank of Korea (BOK) rate hike, which was rather early.
Mr. Kim stated, "Currently, inflation is still low at the interest rate level, which means that there is enough room to cut interest rates."
Besides, KDI advised that in the long term, the government should promote restructuring of enterprises and industries, and create an innovation-friendly regulatory environment. In the meantime, it has been advised to secure competitiveness through constant restructuring of economic systems such as entry of limited competition and improvement of business regulation, and companies should continuously improve their productivity.
Sejong city = By Kwon Dae Gyung kwon213@
[ copyright ⓒ The Digitaltimes ]
The Korea Development Institute (KDI), a national research institute on December 6, presented the economic growth forecast for the year and next year at 3.1% and 2.9%, respectively, in the `Economic Outlook for the second half of 2017`. Compared with the 2.6% and 2.5% suggested in April, it increased by 0.5 % point this year and 0.4 % point next year.
First, the KDI estimated that the world economy recovered smoothly due to the expansion of trade volume and economic improvement. Our economy has been affected by this, and we have seen that these aspects will evolve in the future. The core is the semiconductor. KDI explained that growth will continue as semiconductors will drive overall exports and industrial productivity for the time being. Actual exports were $ 49.67 billion last month, marking record highs in November. Exports contributed to GDP growth of 71.0% from 1Q09 to 3Q09, including the effect of value added.
However, KDI has warned that if semiconductor biases do not improve, it could face a bigger crisis. Income-driven growth in the current government has been effective on private consumption, but exports are unlikely to show robust growth.
The employment market is a fragmentary example. KDI predicted that the number of employed workers will increase from 300,000 to 300,000 next year. Employment is expected to get worse next year.
Meanwhile, according to the Korea International Trade Association`s (KITA), the number of semiconductors is about half of that of automobiles (230,000) and other manufacturing (200,000).
This is interpreted as the fact that export-oriented products such as semiconductors are supporting the whole economy but it is not a condition to continue to lead growth.
Kim Hyun-wook, director of the KDI Macroeconomic Research Division, stated, "Growth is largely due to the strong performance of semiconductors, which means that the competitiveness of the rest of the semiconductor industry is declining." If the price falls and the competitiveness of export- We can face a fall that goes beyond."
The KDI also attacked the Bank of Korea (BOK) rate hike, which was rather early.
Mr. Kim stated, "Currently, inflation is still low at the interest rate level, which means that there is enough room to cut interest rates."
Besides, KDI advised that in the long term, the government should promote restructuring of enterprises and industries, and create an innovation-friendly regulatory environment. In the meantime, it has been advised to secure competitiveness through constant restructuring of economic systems such as entry of limited competition and improvement of business regulation, and companies should continuously improve their productivity.
Sejong city = By Kwon Dae Gyung kwon213@