South Korea growth on track for 2.8% expansion this year

[SEJONG] South Korea's vice finance minister said on Tuesday the domestic economy appears to be on track to achieve the government's 2.8 per cent growth target for this year despite a prolonged slump in exports.

"Although there are many risks ahead, current growth trajectory seems to be what we have estimated before," Choi Sang Mok told reporters in Sejong, about two hours south of Seoul.

"While domestic demand is rebounding, a strike at a carmaker has been restraining production and the overall recovery."

Hyundai Motor's labour union has been on its first full nationwide strike in 12 years since Monday, pressuring September exports down 5.9 per cent from a year ago, according to the nation's trade ministry.

September factory production will also be negatively impacted from the strike, which will remain a risk to overall growth in the fourth quarter, Mr Choi said.

The strikes, which began on a partial-basis in July, have accumulated losses of nearly 2.5 billion won (S$3.10 million), the finance minister said last week.

The uncertainty around the introduction of an anti-graft law will be closely monitored by the government as it could affect revenue at restaurant and entertainment venues, the minister said.

The law, effective from September this year, restricts meals and gifts public officials and journalists can accept.

REUTERS