The national government of South Korea has opted to reduce its growth predictions for the upcoming fiscal given the present global financial condition. The budget strategy of the national government in the initial half of 2012 is expected to cushion the national economy from the aftereffects of the debt crisis in the Eurozone.
The public expenditure at this period will also safeguard South Korea from the slowdown being experienced by the developed economies.
South Korea Budget 2012 Highlights and Possible Impact:
The Ministry of Strategy and Finance, South Korea, has stated that in 2012 the 4th biggest Asian economy will grow by 3.7 percent.
It had previously predicted that the growth will touch the 4.5% mark in that period.
The Ministry has also forecast that in 2012 the GDP will increase by 3.8 percent. It had predicted in June 2011 that the GDP growth rate for the upcoming fiscal will be 4.5%.
The finance ministry has stated that the yearly economic growth for 2012 will be in the range of 1 percent in the first half of that period. This is going to happen due to the debt situation in Europe.
The growth, though, is supposed to increase in the last 6 months of 2012 fiscal.
The government has opted to use up 60 percent of its budget in the first 6 months of 2012. It expects to face some tough times, from an economic point of view, during that period and this decision is expected to help the administration to sustain the fiscal operations at that time. The government has further revealed that it will be flexible while deciding on stabilizing expenses during the upcoming fiscal.
Yearly growth of exports for 2012 has been estimated at 7.4 percent compared to almost 20% for 2011 fiscal. With demands for goods and services going down in Europe and the US, global trade is expected to be slow at that time. The national administration, has expressed hopes that exports will pick up due to the FTA signed with the US in November.
The government expects that yearly inflation will come back to 3.2% in the upcoming financial year. The estimated global prices of raw materials and stabilization of agricultural produce at that time are expected to play a major role in this scenario.
The levels of growth in household income in South Korea in 2012 are estimated to come down from 2011 fiscal. The Asian country already has high levels of household debts and this is expected to make the situation worse.
The 2012 South Korea budget bill is supposed to spend approximately 284.36 billion US dollars or 326.1 trillion won.
The government is expected to increase its expenses in the education and welfare sectors in the upcoming fiscal.
South Korea Economy 2012 Facts:
The Bank of Korea has recently revised its GDP predictions for the 2012 fiscal to match the ones made by the Ministry of Strategy and Finance. The bank has stated that the predicted rates could decrease even further. Its forecasts are 0.1 percentage point lesser than the forecasts of the Korea Development Institute, which is run by the national government.