South Korea facing lower economic growth, higher inflation
South Korea is bracing for a difficult year, with President Lee Myung-bak saying Wednesday that 2008 could be the year of “oil shock,” the same day the country’s finance ministry lowered expectations of GDP growth from 6 percent to 4 percent.
A familiar set of reasons was given for the lowered forecast, notably surging oil prices and the global economic downturn, the Korea Herald reported. Inflation meanwhile, is expected to hit 4.5 percent (higher than the 3.3 percent forecast at the start of the year).
Meanwhile, Lee, the embattled new president, said oil prices would hurt consumer spending, manufacturing and transportation, saying the situation resembled the oil crises of the 1970s. A 10-day strike in June by truckers nationwide over rising fuel prices underscored the tenuous situation.