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By APD writer Alice
South Korea’s Ministry of Economy and Finance has forecast the country’s economy will expand 2.4 percent in 2020 on the expected rebound in export and investment as well as policy measures to boost investment and consumption.
The forecast is higher than a 2.3 percent growth projected by the Organization for Economic Cooperation and Development (OECD), the Bank of Korea (BOK) and the Korea Development Institute (KDI) and a 2.2 percent rise set by the International Monetary Fund (IMF).
Some private think-tanks and foreign investment banks expected next year's growth rate to fall below 2 percent.
The real gross domestic product (GDP), adjusted for inflation, was expected to rise 2.0 percent this year, down from the previous forecast of a range of 2.4-2.5 percent estimated five months earlier.
The real GDP expanded 3.1 percent in 2017 and 2.7 percent in 2018 respectively.
The South Korean government is expected to pour an additional 15,000 billion won ($12.9 billion) into investment projects of large enterprises, bringing the total investment capital for these projects to 25,000 billion won ($21.5 billion). The goal of the government is to reach an investment of 100,000 billion won ($86 billion).
In addition, the government will raise the investment tax deduction and financial support for businesses investing in new equipment. To revive construction investment which has fallen by 4% this year, the government will increase private capital sources for public infrastructure next year to 23,200 billion won (nearly $20 billion), an increase of 3,500 billion won (more than $3 billion) compared to this year.
The South Korean government will adopt a policy of promoting consumption, expanding duty-free supermarkets in immigration areas at major airports across the country and increasing income deduction on credit card payments for domestic hotels. It is considering plans to reduce value-added tax on certain commodities during the shopping and tourism festival "Korea Sale FESTA 2020".
In addition, the Korean government plans to focus on the semiconductor chip manufacturing industry and develop new industries combined with a fifth-generation mobile telecommunications network (5G) to increase motivation for renovation. It will review 10 areas with strict regulations, including the biomedical industry while maintaining policies to support job seekers and small-scale business households.
(ASIA PACIFIC DAILY)
