S. Korea to post 2% growth in 2019 on sluggish exports, investment

한국경제 수출 투자 부진에 2019년도 2% 성장 예상

South Korea is looked to post around two percent expansion this year.
It's lower than previously expected, mainly due to slower trade, investment and consumption.
Kim Hyesung provides an overview of the local economy in 2019.
South Korea is expected to post growth of two percent this year, lower than the government's original outlook last year of between 2-point-six and two-point-seven percent... mainly due to sluggish exports, low investment and slower domestic consumption. "A slower global economy and uncertainties like the U.S.-China trade dispute hurt global trade. South Korea, which is highly dependent on exports, was negatively affected by this trade downturn... on top of sluggish investment."
Semiconductor exports accounted for about a fifth of South Korea's total exports in 2018, but with chip prices plunging this year on oversupply and low demand, chip exports fell sharply.
Shipments to China, Korea's number on export partner fell amid slower Chinese economic growth.
Total exports in the last tweleve months through November this year came to 545 billion dollars, down 10 percent on-year.
Both construction investment and facilities investment dropped by 4 percent and 8 percent respectively, which also negatively affected consumer demand, contributing to low inflation.
For the first time since records began in 1965, Korea saw consumer prices drop, falling point-four-percent in September, triggering fears of deflation.
To support growth, the Bank of Korea has cut interest rates to a record low of 1-point-2-5 percent, and the government carried out an expansionary fiscal policy on top of its three signature policies of inclusive growth, innovative growth and building a fair economy.
"The government's inclusive growth policy of job creation and welfare policies saw positive outcomes this year. The employment rate hit a record high, we saw more newly added jobs. Income distribution fared better with a lower gini coefficient, a lower income quintile share ratio and lower relative poverty rate."
Still, a key task that remains is to improve the quality of jobs and to create more employment for those in their 40s.
With the global economy expected to improve with the U.S. and China agreeing on a phase one trade deal, South Korea's exports will likely go up next year.
To further boost growth, the government has vowed to increase investment and nurture new industries.
Kim Hyesung, Arirang News.

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