By Bae Keun-min
Staff Reporter


Deputy Prime Minister and Finance-Economy Minister Lee Hun-jai predicted the gross domestic product (GDP) would fall into the 4 percent range in the second half of this year, but that the economy could grow by 5 percent for this year.

``Recovery of domestic demands was initially expected to gather momentum from September. But the demand has not been satisfactory due to such negative factors as rising petroleum prices and non-economic reasons, while exports are slowing down,’’ Lee said. He added the economy would grow by 5 percent at best next year.

It is hard to expect exports to fuel the economic growth next year as was the case this year, Lee said, adding, ``Thus, revival of domestic consumption is important than anything else.’’

Domestic demand is expected to be revitalized in the latter half of next year once the government’s aggressive budget spending plan is implemented according to the schedule.

He said the ongoing sluggish construction business will lead to the worsening of the job market as well as dim the prospects for more than 5 percent growth of the economy.

The minister predicted that the economy would see negative effects from shrinking construction orders from the second half of next year. But thanks to expansionary budget spending, domestic demand would not further worsen in the first half of next year.

He defended the growing criticism over the government’s alleged abuse of pension funds in an attempt to boost the economy. He said the government will not forcibly mobilize the pension fund into the public work project, adding that the problem is that pension funds have few chances of investing in attractive projects.

Lee refused to comment on the recent steep appreciation of the Korean currency against the dollar, adding that the government is closely monitoring the currency market trend. However, he said it is not appropriate for the government to comment on the currency policy.

kenbae@koreatimes.co.kr