13 Dec 2011

Economic forecast cut by South Korea

7:35 am on 13 December 2011

South Korea has cut its economic growth forecast, due to a projected slump in exports.

The Ministry of Strategy and Finance says the economy is likely to grow by 3.8% in 2011 and 3.7% in 2012. Previously, it forecast expansion of 4.5% for both years.

The ministry also said South Korea's exports are set to slow to just 7.4% in 2012 from almost 20% in 2011.

The BBC reports exports account for about half of South Korea's economy.

Last month, the Organisation for Economic Cooperation & Development in Paris downgraded South Korea's growth forecast to a level similar to the government's new figure. It cited weak global and domestic demand.

In September, South Korea said it was planning to increase its spending for the next financial year in order to promote job creation.