stage no more than a slight increase ( 1. 4 % in 2011 and 1. 3 % in 2012 ). exports are forecast to continue on their strongly upward track, boosted by the advanced countries ’ sustained recovery mode and the strong growth being registered in the newly emerging countries ( 9. 6 % in 2011 and 12. 5 % in 2012 ). outlook for economic growth employment the number of persons in employment is forecast to rise by 260, 000 in 2011 and by 280, 000 in 2012. the unemployment rate should drop from 3. 8 % this year to around 3. 5 % next year. prices consumer price inflation is seen to accelerate to 3. 5 % in 2011 and to rise about 3. 2 % in 2012. the rate of core inflation, similarly, will edge up above 3 % from next year. current account the current account surplus for 2011 is expected to narrow in scale from this year's 29 billion dollars to 18 billion dollars. for 2012 it is forecast to be around 16 billion dollars. iii. overall assessment & policy tasks overall assessment 1. next year ’ s gdp growth rate of 4. 5 % will be at the trend level 7. the trend of an increase in economic activity should continue as next year ’ s q4 growth ( year - on - year ) is projected at 5. 6 %, well above this year ’ s 4. 8 %. in terms of expenditure sectors, domestic demand and exports are likely to act as twin sources of growth owing to the strengthening of private consumption and facilities investment. – the net growth contribution of domestic demand 8 will be 2. 5 % and that of exports 2. 0 %. o the government ’ s net growth contribution will be at the level of 0. 7 percentage point, the same as in an average year ( 2001 ~ 07 average : 0. 7 % p ). this year ’ s 6. 1 % figure was greatly influenced by the base - period effect during the course of overcoming the global financial crisis. the figures are calculated first by computing the scale of imports induced by domestic demand and exports using the import generation coefficient of the industrial input - output tables by sectors. the scale of imports is then subtracted from the relevant sector. the perceived level of economic activity is expected to improve further as the growth contribution of domestic demand increases, but it is likely to be difficult to narrow significantly its differential from the actual level of economic activity. – the rate of increase of gross domestic income ( gdi ) will trail

that of economic growth because of the worsening of the terms of trade. 2. in the labor market, the trend of improvement will be maintained with a private - sectorled increase in the number of persons employed and a fall in the unemployment rate. having said that, the degree of improvement in qualitative terms will be checked somewhat by the feebleness of large businesses in the creation of what are seen as “ decent jobs ” 9. 3. consumer prices are expected to stay on a rising track for quite some time, carrying over from the 3 1 / 2 % level for this quarter. even as the number of persons employed in the private sector increased by a total of 382, 000 running up to october of this year, that of large corporations decreased by 49, 000. demand pressures are being built up from the sustained rise in economic activity and international commodity prices, wages and rental charges are all on the rise. the accelerated upward trend of chinese wages and prices may also act as a cost push factor for domestic prices by way of higher import prices. expected inflation, which has been on the rise since the beginning of this year, will affect prices after some time lag. 4. the current account will retain its underlying surplus but the scale of this surplus is seen to shrink owing to the expansion of imports drawn in by the strengthened recovery momentum of domestic demand. the ratio of the current account surplus to gdp will drop from this year ’ s 3 % level to below 2. 0 % but above 1. 5 % in 2011. 5. these economic forecasts for 2011 are attended by a considerable degree of uncertainty. domestically, there are the geopolitical risks following the north korean attack on yeonpyeongdo. externally, the unknowns include the sovereign debt problems of the euro area, price instability in china, and the direction of the us fed ’ s monetary policy post - qe2. policy tasks 1. while the korean economy will stay on a solid growth track in 2011, political initiatives should be directed toward raising the living conditions of the public at large including the boosting of purchasing power by way of price stability and the creation of “ decent jobs ”, given the persistent gap between public perceptions of the level of economic activity and the actual numbers. 2. great care must be taken to avoid an enfeebling influence on the domestic financial and foreign exchange markets and on real economic activity from the eurozone debt problems, chinese inflation and the fed ’ s monetary