Based on the forecasts on the total economic scale of 1978, this study attempts to forecast the total economic scale of 1979.
The Korean economy is heavily dependent on exports, which make up over 35 percent of its gross national product (GNP). Considering how the modern world is changing, the Korean government needs to outgrow its export-centered view of economic development and find more varied and sustainable means for continued economic growth.
The world has been experiencing major shifts in the economic terrain since the latter half of 1978, including the rising rivalry between Iran and other Middle Eastern states over oil prices, as well as the self-interested economic policies of the United States, Japan, and other advanced economies.
In the early years of its export-oriented policy, the Korean government focused on fostering the exports of products. During the middle phase of Korea’s economic development, the country began to export workers and services to the Middle East. The remittances sent by Korean workers now in the Middle East have grown to become an indispensable part of the Korean GNP.
However, this excessive dependency of the Korean economy—80 percent of its GNP—leaves it susceptible to fluctuations of worldwide economic conditions. Korean policymakers therefore need to stay updated on the changes taking place around the world, including, but not limited to, the rising inflation in major exporters of commodities, and the political movements that Iran and other member states of the Organization of Petroleum Exporting Countries (OPEC) are making. The United States, which has been struggling with inflation since 1978, expects that the rate of its GNP growth will drop from 3.7 percent in 1978 to two percent in 1979. Japan, facing the appreciating of the yen (JPY), also expects its GNP growth rate to decrease from 5.7 percent to 4.5 percent. Other member states of the Organization for Economic Cooperation and Development (OECD), such as the United Kingdom, France, and Germany, may be faring better than Japan or the United States, but are hesitant to make optimistic forecasts, as economic conditions of other countries can trigger chain reactions worldwide.
In 1978, Korea’s GNP grew by 12.5 percent from the previous year to KRW 13.693 trillion. More specifically, the GNP From the primary sector decreased by 2.3 percent to KRW 2.477 trillion, while the GNP from other sectors grew by 16.3 percent to KRW 11.216 trillion (19.1 percent growth in manufacturing, and 14.6 percent growth in service). Based on these figures, we can forecast that Korea’s GNP will amount to KRW 14.939 trillion in total, with KRW 2.576 trillion from the primary sector, and KRW 12.363 trillion from the other sectors (KRW 7.214 trillion and KRW 5.121 trillion from manufacturing and service, respectively). Regardless of the strong prospective likelihood of growth in 1979, we must not forget that our GNP can easily be influenced by larger external events, always staying on guard against possible changes in the international environment.
1979년도 총량경제규모의 예측(Forecasts on the total economic scale of 1979)
|Journal Title; Vol./Issue||한국개발연구:vol. 1(no. 2)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Macroeconomics|
|Holding||KDI; KDI School|