Korean economy expected to grow 3.5% next year

Most economic forecasters at home and abroad Wednesday said they expect the South Korean economy to grow an average of 3.5 percent next year, which is lower than the government estimate of 3.9 percent, citing volatile economic conditions, including the Fed's plan to pull back from bond purchases. Of 36 economic forecasters, 29, or 80.6 percent, predicted the country's economy growth rate will fall below 3.9 percent next year. Only seven forecast it will rise above the government projection, or remain at the projection, according to data by the Korea Center for International Finance (KCIF). ING, a global financial institution of Dutch origin, as well as Germany's DekaBank, expect the South Korean economy to grow only 2.6 percent, while USB, HSBC and Credit Suisse forecast that the country's economy will be in the lower range of 3 percent. The 2014 growth projection for the South Korean economy by seven financial institutions, including BNP Paribas and Barclays, reached between 3.9 percent and 4 percent. According to the data, the government estimate was 1.3 percentage points higher than the gloomiest outlook of 2.6 percent, and 0.1 percentage point lower than the rosiest forecast of 4 percent. Local economic analysts also predicted that the government may have difficulty in achieving its economic growth target of 3.9 percent next year, as it remains to be seen whether or not the global and domestic economy will bounce back. "The government should fare better next year to achieve its economic growth target of 3.9 percent," said Kwon Soon-woo, a chief economist at Samsung Economic Research Institute. Cho Yong-moo, another analyst at LG Economic Research Institute, said "The government seemed to have painted a rosy outlook on its economic growth for next year. The economic recovery may not be strong due to weak domestic demands."    The Bank of Korea, South Korea's central bank, is expected to lower its 2014 forecast of the country's economic growth to between 3.8 percent and 3.9 percent on Thursday after a monthly rate-setting meeting.