South Korea’s economy is expected to grow in the mid-2 percent range in 2018, slowing down from the 3 percent estimated for this year due to market uncertainties, economists said Monday.

In a seminar arranged by the Korea Economic Research Institute, economists from KERI and the LG Economic Research Institute forecast that South Korea’s economic growth will dip slightly in the new year. The slower pace of growth is due mainly to external uncertainties such as possible US rate increases and the planned renegotiations of the five-year-old free trade agreement between Seoul and Washington, KERI said in a statement.

KERI Vice President Song Won-geun said the country’s business environment will remain unpredictable as labor unions are calling for higher wages and shorter working hours domestically and US rate hikes and renegotiations over terms of the FTA externally.

The domestic economy appears to be on a path to recovery, but it is still heavily dependent on those outside factors, he said, highlighting ample downside risks next year.

LGERI economist Shin Min-young said domestic consumption is expected to shrink next year, as the government has applied stricter rules to keep home prices from rising further. Builders are expected to decrease investment or delay development projects due to low profitability.

The KERI and LGERI economists forecast that the electronics and steel industries will continue to benefit from rising demand although the auto, shipbuilding and petrochemical industries may suffer hard times due to a lack of new models, declining orders and oversupply, respectively. (Yonhao)