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Korea is expected to record a trade deficit of US$5.6 billion next year, the first time since the IMF crisis in the late 1990s that the country will record deficit for two years running. The forecast came from the Ministry of Strategy and Finance in a revised budget for 2009 submitted to the National Assembly on Wednesday.
Growth forecasts for next year have been universally bad. Britain's Standard Chartered Bank in June predicted Korea would achieve 5 percent growth in 2009 but has recently lowered its forecast to a mere 1.4 percent.
On Nov. 1, European investment bank UBS lowered its forecast for Korea's growth from 2.9 percent to 1.1 percent given a possible decrease in exports. And despite in October forecasting growth of 3.5 percent in 2009, the International Monetary Fund is expected to lower the forecast to the 2 percent level.
This year's trade balance is expected to show a $9 billion deficit. But the ministry said despite the trade deficit the current account balance will show a $5 billion surplus in 2009 as service accounts such as tourism will improve.
Meanwhile, the export increase rate dropped to a single digit in October and will highly likely fall below zero in November, a Knowledge Economy Ministry official said. If monthly exports dwindle, this would be the first minus growth in 14 months since September last year.
(englishnews@chosun.com )
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