SEOUL: The South Korean economy is expected to lose steam in 2017 due to sluggish exports and a marked drop in the growth of domestic demand, a leading private think tank said Tuesday. The LG Economic Research Institute (LGERI) projected the growth rate of Asia’s fourth-largest economy to slow to 2.2 percent in the coming year from a 2.6 percent expansion this year. The forecast is unchanged from LGERI’s estimate made in October this year. But it is lower than the state-run Korea Development Institute’s projection of 2.4 percent and the Korea Institute of Finance’s forecast of 2.5 percent.
In its 2017 economic outlook due out next week, the government is widely tipped to downgrade its growth forecast to the mid-2 percent range from an earlier 3 percent. In January, the Bank of Korea is also expected to lower its growth outlook for next year from the previous 2.8 percent. Affiliated with South Korea’s fourth-largest conglomerate LG Group, the LGERI said South Korea’s economic growth will likely lose momentum because of slumping domestic demand and the sustained sluggishness of overseas shipments.