Flagging exports will cause Korea's economy to grow at a worse-than-expected rate this year, Hyundai Research Institute said in its report on Sunday.
According to the Ministry of Knowledge Economy, exports shrank by 1.6 percent for the first eight months of this year, compared to the same period last year. Late in 2011, the government forecast that Korea would see a 7.4 percent growth in outbound shipments for 2012.
If the trend continues, overall exports will grow a mere 1.7 percent this year, the institute forecast. It added that GDP will fall by W17.1 trillion (US$1=W1,134) and some 281,000 jobs will be lost.
This will lead the country's economic growth to retreat by 1.4 percentage points from earlier forecasts, according to the institute. It warned that the economy could fare even worse amid increasing global uncertainties, resulting in lower growth of between 2 and 3 percent than the government's target of 4.5 percent.
Fueling such pessimism, the nation's exports stood at US$42.97 billion in August, down 6.2 percent on-year, the ministry said Saturday. Imports also fell 9.8 percent to $40.93 billion.