Korea: Growth to ease

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), 200548 294
Area (000 sq km)100
CurrencyWon
GDP (Billion USD), 20051 056.3
Life expectancy at birth (Women, Men), 2003 80.8, 73.9
Total labour force (000s), 200523 743
Government typeRepublic
Indicators% change unless otherwise indicated
200620072008
GDP growth5.04.44.6
Household savings ratio3.53.23.3
Consumer price index2.52.93.0
Unemployment rate (%)3.43.43.4
General government financial balance
(% GDP)
2.22.12.0
Current account balance (% GDP)0.30.0-0.4
Source: OECD©OECD Observer No. 258/259, December 2006


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