Rhee Chang-yong, governor of the Bank of Korea (BOK), said this year's economic growth rate in Korea could exceed the BOK's previous forecast of 1.8%. He assessed that robust exports are offsetting a slump in the construction sector and driving growth.
Rhee gave the remarks on the 23rd at a full meeting of the National Assembly's Strategy and Finance Committee in response to a question from Kim Young-jin of the Democratic Party of Korea about this year's growth trajectory.
Rhee said, "The construction cycle and the like are moving in a worse direction than expected, but exports are improving sharply," adding, "For the year as a whole, I see upside risks compared with the 1.8% we projected in Nov. last year."
Asked by Park Dae-chul of the People Power Party about the possibility of revising the growth rate upward, he also said, "Overall, it seems likely to go up (from expectations)." However, when asked whether growth could exceed 2%, Rhee said, "It's hard to answer," avoiding a direct reply.
This is interpreted as suggesting that the actual growth rate could come in higher than the BOK's existing forecast. The Bank of Korea (BOK) plans to convene the Monetary Policy Board on the 26th to decide the base rate and release an updated economic outlook.
On the background of the construction downturn, Rhee said, "Over the past few years, there was a lot of building riding on the real estate boom, and problems stemming from those projects turning distressed are continuing to play out," adding, "I think it needs to be sorted out through restructuring, and it will take considerable time."