1. Economic Growth Forecast
The National Assembly Budget Office (NABO) revised the 2015 real economic growth rate down 0.3%p to 3.0% from its original forecast last year. This is interpreted as an indication that NABO reflected the Korean economy's failure to show clear growth momentum. The IMF also revised the global economic growth rate forecast down to 3.5% from 4.0% as the slowing trend continues. Meanwhile, the Korean economy is expected to shift to a recovery trend in the second half of this year. As low oil price and low interest rate trends continue, private consumption is expected to increase gradually. With the gradual recovery of the global economy, gradual economic growth is expected in 2015~2018.
2. Economic Forecast by GDP Spending Area
With the improved household purchasing power stemming from low oil prices, 2015 private consumption is expected to increase by 2.1%. Construction investment is expected to grow 2.8% thanks to the recovery of investment in the housing market.
Capital investment growth is expected to slow down relatively to 5.2% compared to last year. Based on customs clearance, both exports and imports are expected to decrease, and negative growth rates are expected ( –2.3% and –9.9%, respectively). This year's labor market indicators - i.e. employment and unemployment rates - are expected to show similar trends to those of 2014. Around 400,000 additional people are expected to be employed, which is 25% less than last year. Moreover, the unemployment rate is expected to reach as high as 3.6%. The 2015 consumer price and GDP deflator growth rates are expected to be 0.8% and 1.0%, respectively. Based on low price levels and the slow economic recovery, the 3-year government bond yield is expected to be around 2.0% and the nominal exchange rate (won/dollar) is expected to be 1,092 won.
The National Assembly Budget Office (NABO) revised the 2015 real economic growth rate down 0.3%p to 3.0% from its original forecast last year. This is interpreted as an indication that NABO reflected the Korean economy's failure to show clear growth momentum. The IMF also revised the global economic growth rate forecast down to 3.5% from 4.0% as the slowing trend continues. Meanwhile, the Korean economy is expected to shift to a recovery trend in the second half of this year. As low oil price and low interest rate trends continue, private consumption is expected to increase gradually. With the gradual recovery of the global economy, gradual economic growth is expected in 2015~2018.
2. Economic Forecast by GDP Spending Area
With the improved household purchasing power stemming from low oil prices, 2015 private consumption is expected to increase by 2.1%. Construction investment is expected to grow 2.8% thanks to the recovery of investment in the housing market.
Capital investment growth is expected to slow down relatively to 5.2% compared to last year. Based on customs clearance, both exports and imports are expected to decrease, and negative growth rates are expected ( –2.3% and –9.9%, respectively). This year's labor market indicators - i.e. employment and unemployment rates - are expected to show similar trends to those of 2014. Around 400,000 additional people are expected to be employed, which is 25% less than last year. Moreover, the unemployment rate is expected to reach as high as 3.6%. The 2015 consumer price and GDP deflator growth rates are expected to be 0.8% and 1.0%, respectively. Based on low price levels and the slow economic recovery, the 3-year government bond yield is expected to be around 2.0% and the nominal exchange rate (won/dollar) is expected to be 1,092 won.