South Korea's economic growth was expected to accelerate in 2013 compared with 2012 due to faster export growth and solid domestic demand, a state-run think tank said Sunday.
The Asia's No. 4 economy was forecast to expand 3.6 percent in 2012 due to solid domestic demand, according to the Korea Development Institute (KDI).
The economic growth was predicted to rise to 4.1 percent in 2013 helped by faster growth in exports as well as continued improvement in domestic demand, the KDI said.
Goods exports, which account for around half of the South Korean economy, were projected to expand 7.1 percent in 2012 due to the global economic slowdown, but the exports were forecast to advance 10.7 percent in 2013 thanks to the global economic recovery.
Private consumption was expected to increase 2.7 percent this year before jumping 4 percent next year thanks to the expected stabilization of global oil prices and the enhanced real purchasing power stemming from the appreciation of the South Korean currency against the U.S. dollar.
Oil prices imported from overseas were forecast to gain around 10 percent on-year to 115 U.S. dollars a barrel in 2012, and fall to around 110 dollars per barrel in 2013.
Facility investment will grow 8.1 percent in 2012 due to the low base effect, but it will show a slower expansion of 6.2 percent in 2013 due to lower costs of capital goods import arising from the expected ascent of the local currency against the greenback, said the KDI.
Meanwhile, the consumer price inflation was expected at 2.6 percent for 2012 due to the economic slowdown and policy effects such as the government's support for childcare fees. The headline inflation was forecast to rise to 2.8 percent in 2013 amid the faster growth of the economy.
The outlook for jobless rate was set at 3.4 percent in 2012 and 3.3 percent in 2013 respectively as the economy was expected to show solid job creation trend. The number of people employed will continue to grow over 300,000 on average in 2012 and 2013, the think tank said.