□	우리 경제는 2013년 수출과 내수의 점진적 개선을 바탕으로 완만한 회복세를 나타내며 3.0%의 성장률을 기록할 전망

• 상반기에는 2.2%의 비교적 낮은 성장률을 기록하겠으나, 하반기에는 개선추세가 확대되며 성장률이 3.7%로 상승할 것으로 예상
• 소비자물가는 완만한 경기 개선추세가 이어지는 가운데 공급요인도 하향 안정 화되면서, 2.3%의 비교적 낮은 상승률을 기록할 것으로 전망
• 경상수지는 원화가치 상승 등으로 흑자규모가 300억달러 내외로 감소할 전망

□ The Korean economy is projected to recover at a moderate pace of 3.0% growth supported by gradual improvement in exports and domestic demand in 2013. Korea is expected to grow at a relatively low rate of 2.2% in the first half and then at an improved pace with a 3.7% growth rate in the second half. CPI growth is expected to record a relatively low 2.3%, as the supply-side factors show downward stabilization amid the continuing modest improvement of the economy. The current account surplus is expected to decrease to around $30 billion in 2013, influenced by the appreciation of the won.

Ⅰ. Current Economic Conditions

□	The growth rate of the Korean economy appears to be slowing at a relatively significant pace mainly due to declining exports and weakening investment caused by slower growth of the global economy.

• The Korean economy grew at a rate of 1.6% in the third quarter (0.2% quarter-on-quarter), continuing on its downward course since the second half of the previous year.
• Meanwhile, GDI grew at a rate of 2.9% in the third quarter (1.2% quarter-on-quarter), slightly up from the second quarter (2.2%), mainly due to the improvement of terms of trade.

□	Consumption and exports improved slightly, whereas investment continues to decline.

• Private consumption showed a low rate of growth since the second half of the previous year, but recently grew at a slightly stronger pace due to the recovery in real purchasing power caused by the improvement in terms of trade and the decline in domestic inflation.
• Equipment investment slowed down at a fast pace influenced by the growing uncertainties at home and abroad, and construction investment showed continued weakening mainly in residential buildings.
• Exports have slowed down influenced by the weakening of the global economy due to the euro area crisis, but recently showed some signs of recovery.

□	The labor market appears to maintain positive employment conditions, as real wage continues to rise at a relatively high rate amid the continued increase in the number of employed persons.

• The increase in the number of employed persons, however, is mostly non-wage workers such as the self-employed.
• Headline CPI grew at a slower rate influenced by economic slowdown and the fall in import prices.

□	The financial market remained relatively stable with continuing favorable movement in foreign exchange transactions despite growing external uncertainties such as the euro area crisis.

• While the ratio of short-term debts to foreign exchange reserve remained at a stable level, the value of the won has risen due to the increase in capital inflow resulting from the recent quantitative easing by leading advanced economies.
• Household debts, in terms of aggregate amount, have risen at a slower rate, but the delinquency rate rose slightly influenced by the continued weakening of the economy.

□	The global economy is expected to recover at a very modest rate influenced by the economic slowdown in the euro area and the fiscal uncertainties of the US.

• The US appears to continue on a very gradual recovery course, but the euro area is expected to experience a prolonged slowdown in its economy and a significant fall in its growth rate.
• Emerging market economies are projected to see their exports rise at a slightly lower rate due to the weakening of global economic growth, but are expected to maintain a modest pace of growth given their capacity for policy responses.
• While revising down the projection for growth rate, major forecasting institutions assessed that overall downside risks run high including the possibility of the euro area crisis spreading and the fiscal cliff in the US.
  

□	The Korean economy is projected to recover at a modest pace, as the rate of decline in exports eases and the consumption, mainly domestic demand, improves gradually.

• It is expected that the rate of decline in exports will ease as external and internal uncertainties somewhat decrease, and that the domestic demand will post a slight improvement compared to a year ago as inflation and trade terms stabilize.
  - However, the Korean economy is expected to recover at a modest pace, as the global economy in general is forecast to grow at a weak pace.
• As for external risk factors in the future, lingering uncertainties over the possibility of the euro area crisis spreading and the US fiscal cliff realization are forecast to pose a threat to the global economy for a considerable time to come.
  - As for internal risk factors, when the slowdown in the housing market continues for a long period, it is likely that due to decreases in private consumption and construction investment, the economic slowdown will worsen and cause real asset prices to fall further.
  

□	Macroeconomic policy should be managed with more aggressive responses so as to accomplish economic stabilization, given the economic slowdown became worse than anticipated and is forecast to recover at a moderate rate.

• Fiscal policy needs to be operated in a more extensive way without causing any damages on the medium- and long-term fiscal soundness so as to contribute to the economic stability.
• Monetary policy should be operated in an aggressive manner with more focus on stabilizing the economy taking into account the recent trend of rapidly weakening inflationary pressure.
• Meanwhile, given the possibility that the capital inflow will be accelerated due to the spread between internal and external interest rates and the expectation for the appreciation of the won, preparatory measures need to be developed to monitor the market trend closely and to deal with likely side effects in the future.
• From the medium- and long-term perspective, the direction of macroeconomic policy needs to be managed in a conservative way to prepare for the possibility of continuing low growth such as by revising down the criteria of economic stabilization.

Ⅱ. Domestic Economic Outlook for 2013

1. Major Assumptions

□	The global economy in 2013 is projected to grow at a slightly improved rate, compared to 2012, but the pace of recovery is likely to be modest.

□	Oil prices (Dubai) are projected to be around $100 per barrel on an annual average basis in 2013 with signs of downward stabilization.

□	The value of the Korean won is projected to rise by around 7% on an annual average, as uncertainties in global financial markets diminish and key advanced economies maintain the policy stance of quantitative easing.

2. Major Forecasts for 2013

□	Korea's GDP growth rate is projected to record 3.0% in 2013 with a modest pace of recovery supported by gradual improvement in exports and domestic demand.

• Korea is forecast to grow at a relatively low rate of 2.2% in the first half due to lingering uncertainties such as the euro area crisis, and then at an improved pace with a 3.7% growth rate in the second half.
• Private consumption is expected to register a 2.7% growth in 2013, a larger increase than 2012, supported by stabilized terms of trade and improved real purchasing power brought by the appreciation of the won.
• Equipment investment is projected to recover slightly from its weakness in 2012 with a growth rate of 5.3% in 2013, helped by a modest recovery of investment demand based on improving economic conditions.
• Construction investment is expected to register a 2.3% growth rate in 2013 with a modest recovery from the recent slowdown.
• The goods export (in terms of volume) is forecasted to register a growth rate of 6.9% in 2013 with a moderate recovery influenced by the global economy improving at a gradual pace.
• The goods import (in terms of volume) is expected to register a 5.9% growth in 2013, slightly up from the previous year (2.2%), supported by domestic demand and exports recovering at a modest pace.
  

□	The current account surplus is expected to decrease to around $30 billion in 2013 from a year ago, influenced by the appreciation of the won.

• Goods account is expected to record a surplus of around $35 billion, similar to 2012 ($34 billion), as exports and imports grow at a similar rate.
• Services and primary and secondary income accounts are expected to record a deficit of around $5 billion in 2013, reversing from the surplus of $3 billion in 2012.
  

□	Headline CPI is expected to grow at a relatively low rate of 2.3%, as the supply-side factors show downward stabilization amid the continuing modest improvement of the economy.

• Core inflation is expected to rise slightly with a 1.9% growth, reflecting the moderate economic improvement.
  

□	The unemployment rate is forecast to record 3.2% in 2013, slightly down from a year ago, reflecting the modest pace of improvement of the economy.

• The number of employed persons is expected to rise by approximately 300,000 or slightly more on an annual average basis, a reduced increment compared to 2012 (400,000 or slightly more), influenced by the weakening of labor supply factors such as part-time workers and the self-employed.
  

Economic Forecast for 2010~11

(year-on-year basis, %, USD 100 million)

	2012					2013
	1/4 1)	2/4 1)	3/4 2)	4/4	Yearly	1/4	2/4	Yearly
GDP (seasonally adjusted quarter-on-quarter) Total Consumption 　Private Consumption Total Fixed Investment 　Equip. Investment 　Construction Total Exports (Quantity) Goods Exports(Quantity) Total Imports (Quantity) Goods Imports(Quantity)	2.8 (0.9) 2.2 1.6 4.6 8.6 1.5 4.7 4.0 4.4 4.6	2.3 (0.3) 1.7 1.1 -2.1 -3.5 -2.1 3.2 2.1 0.5 -0.1	1.6 (0.2) 1.9 1.5 -2.0 -6.0 -0.1 2.6 2.8 0.9 0.4	2.1 (0.6) 3.0 2.5 0.7 2.0 -0.9 4.9 5.4 4.2 4.1	2.2 2.2 1.7 0.1 0.0 -0.6 3.8 3.6 2.5 2.2	2.2 (0.9) 2.8 2.4 1.2 -0.1 1.5 6.1 6.6 4.4 3.9	3.7 (1.1) 3.2 3.0 5.9 10.8 3.1 6.8 7.3 7.8 7.8	3.0 3.0 2.7 3.7 5.3 2.3 6.5 6.0 6.1 5.9
Current Account Goods Trade Balance 　Exports (Amount) 　　　　(%) 　Imports (Amount) 　　　　(%) Service Primary· Secondary Income	26 26 1,346 (5.4) 1,320 (8.3) -1	112 85 1,388 (-2.8) 1,303 (-3.6) 27	147 135 1,372 (-2.9) 1,237 (-7.8) 12	92 96 1,381 (-1.9) 1,285 (-1.5) -4	377 342 5,488 (-0.7) 5,145 (-1.4) 34	150 168 2M795 (2.2) 2,627 (0.2) -18	154 187 2,868 (4.1) 2,681 (6.3) -33	304 355 5,663 (3.2) 5,308 (3.2) -51
CPI Inflation (Core inflation)	3.0 (2.5)	2.4 (1.6)	1.6 (1.4)	1.7 (1.3)	2.2 (1.7)	2.1 (1.7)	2.5 (2.1)	2.3 (1.9)
Unemployment Rate (Seasonally Adjusted)	3.8 (3.5)	3.3 (3.3)	3.0 (3.1)	2.9 (3.1)	3.3	3.5 (3.4)	2.9 (3.0)	3.2

　Note: 1) Denotes preliminary estimates.
　　　　 2) Advance estimate.

Ⅲ. Policy Recommendations

1. Fiscal Policy

□	Fiscal policy needs to be managed in a way that helps improve responsive capability of the economy such as considering an additional increase in expenditure while monitoring external uncertainties closely.

• The fiscal policy stance for the coming year is considered slightly more expansionary than the current year, but it is deemed that a more active role of fiscal policy may be required for economic stabilization.
  - It is recommended to secure as many tax bases as possible through efforts to increase non-tax revenues, for instance the selling of held assets, and through tax rationalization, with consideration of the reduction in government revenue caused by economic slowdown.
  - It is necessary to manage the expenditure in a way that helps improve responsive capability of the economy, within the scope that does not lead to permanent increase in fiscal expenditure, when deemed necessary after close monitoring of internal and external economic conditions.
• Meanwhile, once the macroeconomy enters into the phase of its normal mode, policy efforts should be strengthened so that the fiscal soundness will return to the pre-financial crisis level.

2. Monetary Policy

□	Monetary policy should take more aggressive actions against economic slowdown by further reducing interest rates given the pending economic conditions and the capacity of policy responses.

• Now that inflationary pressures is not very high and the growth of household debts is on the decline, implying the reduced burden from lowered interest rates, it would be appropriate to buffer the economic slowdown by managing the monetary policy in a more flexible manner.
  - Meanwhile, it is expected that lowering interest rates will reduce the possibility of a rapid capital inflow by narrowing the spread between internal and external increase rates, and will contribute to easing the slowdown of the housing market.
  

3. Financial Policy

□	With a continued rise in household loan delinquency, it is necessary to strengthen risk management and stable restructuring of household debts.

• Recently, household loan growth has slowed slightly due to the weakening economic conditions caused by internal and external uncertainties, but delinquencies for household loans are on a continued rise.
  - As concerns are constantly voiced over the possibility of the increasing number of the vulnerables, in particular, being insolvent due to their weak repayment capability, it has raised the need to strengthen the risk management of household debts.
  

□	Institutional problems in the current system, such as corporate rehabilitation procedure stipulated in the Debtor Rehabilitation and Bankruptcy Act, need to be addressed for system improvement.

• The number of companies filing for court receivership has jumped recently, and there are more and more cases of sitting executive management being assigned as a court-appointed receiver, triggering problems of moral hazard.
• It is necessary to provide failing companies with opportunities for being rehabilitated based on the agreement between creditor and debtor by reforming problematic procedures to file for court receivership. Also, institutional improvements need to be made such as by removing sitting executive management responsible for mismanagement from the list of court-appointed receivers.
  

4. Labor Market Policy

□	A recent increase in employment has been mainly driven by workers engaged in small businesses and low-wage workers, hence it is time to systematically manage and focus policy attention on these workers.

• In the current employment structure which has a high proportion of low-wage workers, a continued weakening of economic conditions could serve to be a risk factor in the labor market afterwards.
• For this reason, it is necessary to strengthen the work-to-welfare linkage by complementing the safety net of employment so that vulnerable employment conditions facing low-wage workers would not lead to unemployment and poverty.
  - To that end, it is necessary to increase diverse services for recruitment of low-wage workers and the self-employed such as by removing the blind spots of the safety net of employment, and also to strengthen programs to develop their vocational capability.

제1부 경제전망 및 정책방향
　Ⅰ. 현 경제상황에 대한 인식
　Ⅱ. 2013년 국내경제 전망
　Ⅲ. 정책방향

제2부 경제현안 분석
　Ⅰ. 기초노령연금의 대상효율성 분석과 선정기준 개선방안
　Ⅱ. SOC 투자규모의 적정성 평가 :2012~16년 국가재정운용계획안을 중심으로
　Ⅲ. 재정지원 일자리사업의 현황과 개선방향
　Ⅳ. 건설부문 재무안정성에 대한 평가 및 시사점
　Ⅴ. 향후 재정정책기조에 대한 평가 및 시사점

제3부 국내외 경제동향
　Ⅰ. 국내경제 동향
　Ⅱ .세계경제 동향