S.Korea’s economy expected to rise 2.8% in 2022

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Xinhua News

18th May 2022 – (Seoul) South Korea’s economy was expected to rise 2.8 percent this year due to a rebound in private consumption, a state-run think tank said Wednesday.

Real gross domestic product (GDP), adjusted for inflation, was forecast to grow 2.8 percent in 2022 from the previous year, according to the Korea Development Institute (KDI).

The real GDP advanced 4.0 percent in 2021 after falling 0.9 percent in 2020 amid the negative effect of the COVID-19 pandemic.

The KDI said consumer spending would be on a solid recovery this year as the country lifted social-distancing rules amid the positive effect of the government’s extra budget bills to reinvigorate the economy.

Private consumption was projected to expand 3.7 percent in 2022 after gaining 3.6 percent in the previous year.

Facility investment was forecast to decline 4.0 percent this year on a lower investment in the semiconductor industry, while investment in the construction sector was predicted to slide 1.3 percent on higher construction materials cost.

Both export and import were expected to grow at a slower pace this year due to the worsened external uncertainties, such as geopolitical risks in Europe.

Export was forecast to grow 5.1 percent in 2022 after increasing 9.9 percent in 2021, while import was projected to gain 4.9 percent this year after climbing 8.5 percent last year.

Outlook for headline inflation was set at 4.2 percent in 2022, sharply up from 2.5 percent tallied in 2021.

It was ascribed to soaring commodity prices, especially crude oil, as well as the modest economic recovery, the KDI noted.

Current account surplus was forecast to diminish to 51.6 billion U.S. dollars this year from 88.3 billion dollars tallied in the previous year on the back of the worsened terms of trade.

The number of jobs was expected to go up 600,000 in 2022 after growing 370,000 in the prior year.

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