By Kwanwoo Jun
South Korea's economic recovery is forecast to be slower than expected this year, with inflation likely to be sticky, the Ministry of Economy and Finance said in a semiannual report.
The ministry on Thursday said it expects the country's gross domestic product to rise 2.2% in 2024, softer than its July forecast of 2.4% growth. Asia's fourth-largest economy is estimated to have expanded 1.4% in 2023.
The ministry now expects inflation to average 2.6% for 2024, compared with its previous forecast of 2.3%, after standing at an estimated 3.6% in 2023.
Exports, helped by the semiconductor-industry upturn, are expected to support the economic recovery, but sticky inflation and high interest rates are likely to suppress private consumption and restrict construction investment, the ministry said.
A global trade recovery can help South Korea's exports rise 8.5% in 2024 after an estimated 7.4% fall in 2023, likely allowing its current account surplus to widen to $50 billion this year from an estimated $31 billion last year, the ministry said.
Inflation may still be vulnerable to geopolitical risks and weather conditions, though it will likely continue to ease on stabilizing raw-material prices globally, the ministry said.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
01-03-24 2225ET
