Real GDP growth in 2010 reached 6.1%, boosted by an acceleration in private consumption growth, strong investment and a pick-up in demand for South Korean exports. The country's vigorous economic recovery will continue to be supported by improved business and consumer confidence. Respectable growth rates in the US and euro zone economies, as well as emerging markets, will help the world economy (at market exchange rates) to grow by 3.1% in 2011. These two developed economies remain key sources of demand for South Korea's exports, even though the country's exporters are becoming increasingly reliant on demand in emerging markets. Given that growth in exports of goods and services is outstripping that of imports in 2011, the contribution to GDP growth from the foreign balance will be positive this year. On balance, overall real GDP growth in 2011 will average 4.6% and will continue to be driven by recovering consumption and investment.

Annual GDP growth will average 4% in 2012-15-a respectable pace, but below the trend rate of growth of around 5% a year in the period following the 1997-98 Asian financial crisis, and also considerably slower than the blistering pace of expansion recorded in the years immediately preceding the 2008-09 global financial crisis. The relatively subdued rate of economic growth from 2012 will largely reflect the after-effects of the global crisis and the wealth destruction that occurred in 2008-09. This will prevent a strong recovery in domestic demand in other OECD markets; the relatively robust outlook for the US economy in 2011 is partly statistical and partly driven by the expected temporary effects of further fiscal stimulus measures in that country. The poor outlook in OECD economies will in turn cloud South Korea's export prospects during the forecast period. Indeed, another deterioration in the global economy would undermine the country's export-dependent economy.

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