South Korea can achieve 3% GDP growth in 2016: finance minister

[SEOUL] South Korea will maintain policies aimed at boosting domestic demand over the next year as the global economy shows no signs of restoring strong growth, the country's finance minister said on Friday.

Addressing a meeting with heads of major domestic research institutes, Finance Minister Choi Kyung-hwan also said these polices will enable the country to achieve the goal of lifting economic growth to 3 per cent or higher.

"A clear improvement is hard to expect in the world economy next year and the government will employ measures that can boost the private-sector activity to the maximum so that the domestic demand-led recovery can continue," Mr Choi said.

The comment contrasts with scepticism among some global institutions, including ratings agency Moody's Investors Service, which have warned South Korea's economic growth would fail to post any meaningful rebound next year and stay below 3 percent.

The central bank cut its forecast for this year's economic growth to 2.7 per cent from the previous 2.8 per cent, compared to an actual 3.3 per cent rise recorded in 2014. The Bank of Korea's 2016 growth forecast is 3.2 per cent.

Separately, the central bank's governor said at another event early on Friday that the recent deadly attacks in Paris and the subsequent anxiety around the world would not have a direct impact on the real economy but deserved a close watch.

"International financial markets have quickly returned to stability but it has yet to be seen how that will influence the already weak economic recovery in the euro zone and whether the impact on the sentiment will spread wider," BOK Governor Lee Ju-yeol told a meeting with top executives from the major local commercial banks.

REUTERS