This research seeks to make economic forecasts by a quantitative approach, in accordance with development plans of the agricultural, export, and heavy-chemical industries for the year 1972-73. The period marks the first year of the third phase of Korea’s Five-Year Economic Development Plan. Based on this forecast, the research also aims to suggest appropriate strategies of growth.
Economic problems such as inflation–a result of slowed or high growth, are global problems faced by countries throughout the world. In order to address these issues, acceptance and an understanding of the current situation is needed in order to be capable of developing a new engine of energy for the future. Though growth can bring hardship to people’s living while there is also the uncertainty of recession, efforts for building the future should not be stopped. What will be traded off in the future will have to be given thought aside from measuring the trade-offs in the present–between growth and stability or between countries. The continuing slowdown found in growth for the past 2 years is in fact desirable for the future, as it may be a stage of pain for the next process of development. Meanwhile, the uncertain situation in the economy is bound to stay.
Looking at the recession that spread during American President Nixon’s time, or in Europe, or any other examples in history, all point to inflation as an unavoidable price to pay for growth. Though Korea’s growth is unstable, depression may throw panic as the country has long worked for high growth. However, what Korea also needs is to adapt itself to the phenomenon and recognize it as part of a repeating trend.
Growth forecasts for the year 1972 is difficult compared to the previous year. In particular, the adjustment of currency values among countries is expected to be influenced by the appreciation of currencies. In 1972, Korea’s GNP is predicted to grow by 7.3% with an annual average inflation rate of 13.3% while the agricultural industry is expected to grow annually by more than 4.5%. Growth in other industries is expected to make a small increase or stay stagnant. The service industry in particular, is expected to record a growth rate not higher than 6.0%. The low growth rate of GDP is expected to last longer due to the decrease of capital abroad and the sudden increase of foreign investments. Besides Korea, the world in general is not expected to raise its GNP by a level higher than 7%. In this context, the study proposes policies that are targeted at achieving an annual growth rate of 7.3% and stabilize the 9.5% current growth level by the end of the year.
If the growth of 1972 can be maintained for a stable period of time, a growth rate between 8.3% at the least and 9.2% at the highest seems not too difficult to achieve for the following year. Based on an industry-oriented development, the annual growth rate for 1973 can be predicted at a level of between 14.5% at the lowest and 14.8% at the highest, marking an average of 14.7%, which is higher than 12%, the highest level of growth rate in the previous year.
Furthermore, as private investments increase, the overall rise in investments is expected to grow by an annual rate of 10.8% compared to the previous year. However, predictions and policy suggestions based on these predictions should not show a big difference from that of the previous year, which can be fulfilled only when the economic policies are implemented continuously. In order to achieve the 3S of ‘security, stability and sustainable development,’ continuous efforts to achieve the country’s growth target of 8.5% will have to be exerted while laying the supporting policies as a foundation.
총자원예산을 위한 성장전략(Growth strategy for the drafting of the 1972-73 overall resource budget)
서울 : 한국개발연구원
|Series Title; No||연구, 조사보고|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국개발원; KDI 국제정책대학원|