OECD keeps S. Korea's growth outlook for 2018, 2019 at 3%
- 6 years ago
OECD, 한국 경제성장 3.0% 유지
The Organization for Economic Cooperation and Development has maintained South Korea's growth outlook for this year at 3 percent.
While the global body believes short-term economic prospects are fine, it did lay out necessary plans for long-term expansion.
Ko Roon-hee explains further.
In it's latest economic survey released Wednesday, the OECD has kept its growth outlook for South Korea at 3 percent,... the same it's been since March.
No change either in the forecast for next year -- also at 3 percent.
This is a biannual survey more comprehensive than the OECD's more frequent growth forecasts. It focuses on a country and lays out its economic problems and possible solutions.
The report says the South Korean economy rebounded in 2017…thanks to an uptick in world trade and surging demand for the nation's semiconductors.
However, the country faces risks…such as high levels of household debt.
Household debt has risen to 180% of disposable income... which is far higher than the OECD average.
The report also said South Korea is vulnerable to shocks because its growth is unbalanced, driven mainly by exports and manufacturing,… which has led to economic and social polarization.
It added that family-controlled business groups known as chaebols are causing a large number of problems -- for one, they're hindering entrepreneurship.
Some experts say reforming the chaebols is key to innovative growth.
They also point out that South Korea lags behind in many areas, such as investment in R&D... and deregulation.
"For innovative growth, a country should focus on R&D investment. It should also encourage companies to invest in whatever they want and sell whatever they want. This means less regulation. However, South Korea is not seeing good results in these fields."
To tackle the rapid aging of the country's population, the OECD suggests a gradual increase in value-added tax rates to pay for greater social spending.
The report also proposed a range of potential changes to boost Korea's quality of life. Those include measures to reduce poverty among the elderly… which it says could be achieved by increasing the basic pension and focusing it on the poorest senior citizens.
Ko Roon-hee, Arirang News.
The Organization for Economic Cooperation and Development has maintained South Korea's growth outlook for this year at 3 percent.
While the global body believes short-term economic prospects are fine, it did lay out necessary plans for long-term expansion.
Ko Roon-hee explains further.
In it's latest economic survey released Wednesday, the OECD has kept its growth outlook for South Korea at 3 percent,... the same it's been since March.
No change either in the forecast for next year -- also at 3 percent.
This is a biannual survey more comprehensive than the OECD's more frequent growth forecasts. It focuses on a country and lays out its economic problems and possible solutions.
The report says the South Korean economy rebounded in 2017…thanks to an uptick in world trade and surging demand for the nation's semiconductors.
However, the country faces risks…such as high levels of household debt.
Household debt has risen to 180% of disposable income... which is far higher than the OECD average.
The report also said South Korea is vulnerable to shocks because its growth is unbalanced, driven mainly by exports and manufacturing,… which has led to economic and social polarization.
It added that family-controlled business groups known as chaebols are causing a large number of problems -- for one, they're hindering entrepreneurship.
Some experts say reforming the chaebols is key to innovative growth.
They also point out that South Korea lags behind in many areas, such as investment in R&D... and deregulation.
"For innovative growth, a country should focus on R&D investment. It should also encourage companies to invest in whatever they want and sell whatever they want. This means less regulation. However, South Korea is not seeing good results in these fields."
To tackle the rapid aging of the country's population, the OECD suggests a gradual increase in value-added tax rates to pay for greater social spending.
The report also proposed a range of potential changes to boost Korea's quality of life. Those include measures to reduce poverty among the elderly… which it says could be achieved by increasing the basic pension and focusing it on the poorest senior citizens.
Ko Roon-hee, Arirang News.