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Govt. eyes economic growth in 3% range in 2018

The government expects the economy to grow in the 3 percent range in 2018 following an estimated expansion of more than 3 percent this year, informed sources said Wednesday.

It would mark the first time in seven years that Asia's fourth-largest economy will likely achieve a growth rate of 3 percent or more for two straight years.

According to the sources, the finance ministry is slated to unveil its 2018 economic policy a week later, which may target an economic growth rate of 3 percent or higher.

Containers waiting to be shipped at South Korea`s main sea port of Busan. (Yonhap)
Containers waiting to be shipped at South Korea`s main sea port of Busan. (Yonhap)

The South Korean economy is estimated to gain more than 3.2 percent in 2017 from the previous year should its on-quarter growth be above 0.02 percent.

In 2010, the economy surged 6.5 percent on-year, with the on-year growth rate reaching 3.7 percent a year later.

Earlier in July, the government projected the economy to expand 3 percent on-year in 2018.

"The government is expected to target an economic growth rate of at least 3 percent for next year," said Ju Won, a senior researcher at the Hyundai Research Institute. "There is a high possibility of the government presenting a goal of 3.1 percent."

The government forecasts consumer spending to improve thanks to more jobs and wage hikes despite a slowdown in corporate investment.

Backed by private and public efforts to create more jobs, the number of employed people is predicted to rise by around 360,000 next year.

Consumer prices are expected to increase 1.8 percent on-year on stable oil and farm prices, with the country's current account surplus likely to edge down to US$70.5 billion.

Forecasts are growing that the South Korean economy will likely expand 3 percent or more in the coming year.

After a monthly rate-setting meeting, Bank of Korea Gov. Lee Ju-yeol projected the economy to grow around 3 percent in 2018 from a year earlier.

Foreign and domestic institutions -- including the International Monetary Fund, the Organization for Economic Cooperation and Development, and the Korea Institute for Industrial Economics & Trade -- have offered a growth forecast of 3 percent.

Foreign investment banks, such as Barclays and Goldman Sachs, have predicted the South Korean economy to grow 3.1 percent, with Bank of America Merrill Lynch and UBS each presenting an estimate of 3 percent.

Those institutions have expected South Korea's exports to continue solid growth on a thaw in Sino-Korean relations amid an improvement in private consumption.

However, construction investment is widely expected to slow down due to government moves to cool the overheating property market and a decline in the government's infrastructure budget. (Yonhap)