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Korea's potential growth rate expected to fall to 2.5% for next 4 years Updated: 2019-05-20 07:06:02 KST


Korea's potential growth rate continues to dropand the situation isn't likely to improve in the near future.
The potential growth rate indicates how much a country could grow, without triggering inflation, if it used all of its given resources.

A report Sunday from the Korea Economic Research Institute sees Korea's potential growth rate falling to 2.5 percent from this year through 2022.
This is down from the previous period's figure of 2.7 percent.

The institute points out that the figure decreased sharply after the Asian financial crisis of the 1990s and the global crisis a decade ago.

As for this year's grim figures, researchers point to a decrease in productivity on the supply side.
This means that local companies are investing less in facilities and R&D than they used to.

A separate report the same day from Hyundai Research Institute explained which industries are going through especially hard times in terms of facilities investment.
The institute says none of Korea's main manufacturing industries are experiencing continued growth.


For instance, the auto industry is experiencing a slowdown in investment in line with the first quarter's slower growth in production and shipment.
In electronics, production and shipment actually shrank, also indicating a slump in investment.

To turn things around, analysts point to the importance of regulatory reform and a continued expansion of fiscal spending.
For the companies themselves, they recommend improving the competitiveness of export products and reaching out to new markets.
Ko Roon-hee, Arirang News.
Reporter : krh@arirang.com
KOGL : Korea Open Government License
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