World Economy

South Korea to Grow 3 Percent

South Korea to Grow 3 PercentSouth Korea to Grow 3 Percent

The Organization for Economic Cooperation and Development has predicted South Korea’s economy will grow 3% this year, holding on to its earlier outlook, Yonhap reported. In a biennial report published on the South Korean economy on Wednesday, the OECD said the fourth largest Asian economy will grow at 3% for both this and next year. The organization highly assessed the Moon Jae-in administration’s income-led growth initiative, saying a minimum wage hike and welfare expenditure expansion would contribute to household income growth and private consumption expansion. However, it said the country needs to enhance labor productivity. It also pointed to the nation’s excessive dependence on particular industries, including semiconductors, as its risk factor along with possible expansion of trade protectionism and high household debt. Meanwhile, global rating agency Moody’s Investors Service says uncertainty surrounding the geopolitical risks on the Korean Peninsula remains even after a recent detente in relation to North Korea. Christian de Guzman, vice president at Moody’s, made the assessment in a media briefing on Wednesday, arguing that geopolitical risk is the main constraining factor for South’s sovereign rating.

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