Output growth is expected to ease from 5% in 2006 to around 4.5% in 2007-08 as a result of less buoyant domestic demand. The significant appreciation of the won is bringing the current account from surplus into balance, while helping to keep inflation in the central bank’s medium-term target zone.
Monetary policy should aim at keeping inflation in the target zone over the medium term, while concern over increases in housing prices should be addressed through tax measures and policies to increase supply. Fiscal policy should focus on the medium-term objective of a balanced budget by 2009. The environment for business investment should be improved through regulatory reform, including greater employment flexibility.
|Population (000s), 2005||48 294|
|Area (000 sq km)||100|
|GDP (Billion USD), 2005||1 056.3|
|Life expectancy at birth (Women, Men), 2003 ||80.8, 73.9|
|Total labour force (000s), 2005||23 743|
|Indicators||% change unless otherwise indicated|
|Household savings ratio||3.5||3.2||3.3|
|Consumer price index||2.5||2.9||3.0|
|Unemployment rate (%)||3.4||3.4||3.4|
|General government financial balance|
|Current account balance (% GDP)||0.3||0.0||-0.4|
No. 258/259, December 2006