South Korea's potential growth rate to hit record low next year, OECD forecasts

SEOUL, April 26 (AJP) - South Korea's potential growth rate is projected to fall to a record low next year, continuing a downwred trend for over a decade, according to a report released by the Organisation for Economic Co-operation and Development (OECD) on Sunday.

The country's potential growth rate is projected to slip to 1.71 percent this year from 1.92 percent last year, falling further to 1.57 percent next year before dipping to 1.52 percent in the fourth quarter.

The rate gauges an economy's growth capacity, measured by the maximum level of output it can sustain by fully utilizing labor, capital, and other resources without triggering inflation.

South Korea's potential growth rate has been falling steadily since 2012, when it was 3.63 percent. If this trend continues through next year, it will mark 15 straight years of decline.

The Paris-based agency also projected that South Korea will rank 20th among OECD member economies by potential growth rate this year, down one notch from last year, overtaken by Slovakia, whose GDP per capita, estimated by the International Monetary Fund (IMF), remains more than US$6,000 below South Korea's $37,412.

The IMF also earlier predicted that Taiwan's per capita GDP would reach $42,103 this year, surpassing the $40,000 mark ahead of South Korea. Taiwan's per capita GDP stood at $39,489 last year.

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