SEOUL - SOUTH Korea's economic growth this year could fall below the central bank's forecast of 2 per cent as the global recession deepens, the country's second vice finance minister said in a prepared speech on Thursday.
'Economic growth is expected to fall below forecasts by major organisations such as the Bank of Korea's for 2 percent,' Second Vice Finance Minister Bae Kook-hwan said in his presentation material for a local business forum.
The finance ministry has an official growth target of around 3 per cent, but an increasing number of private-sector researchers have predicted Asia's fourth-largest economy would contract for the first time since the 1997-1998 Asian financial crisis.
The central bank estimated South Korea's export-driven economy to have expanded by 3.7 per cent last year after growth of 5.0 per cent in 2007.
Mr Bae said the local economy may find some momentum for recovery in the second half of this year when fiscal stimulus measures and monetary easing introduced by local authorities will have started taking effect.
Mr Bae put the value of fiscal stimulus and tax cut plans introduced in the past several months at 140 trillion won (S$154.4 billion), which is equivalent to some 15 per cent of the country's annual gross domestic product.
The central bank cut the policy interest rate by a total of 2.75 percentage points over the past three months to a record-low 2.5 per cent in to cushion the economic downturn. -- REUTERS
