The South Korean government’s forecasts for this year’s economic indices appeared to be sanguine, perhaps too much so, according to critics.

In December, the Ministry of Strategy and Finance said in its economic forecast report that the nation’s economy would grow by 3.8 percent in 2015, while exports and imports were expected to rise 3.7 percent and 3.2 percent, respectively.

Private think tanks and global financial institutes believe the government is being too optimistic, and are calling for measures to address the persisting risks facing the economy.

Overseas, deflation in the eurozone, coupled with changes in the Chinese economy and an interest rate hike in the U.S. were cited as the chief concerns ― along with the weakening Japanese currency.

At home, dormant domestic demand was expected to continue bogging down the economy. 

Against this backdrop, the state-run Korea Development Institute put the nation’s economic growth rate at 3.5 percent. Private institutions such as KDB Daewoo Securities and Hyundai Research Institute also released forecasts in the 3.5-3.6 percent range.

LG Economic Research Institute was an exception and predicted 3.9 percent. It also said that the nation’s current account surplus would exceed $100 billion this year, a figure that tops the $82 billion set by the Finance Ministry.

LG said it expected the global economy to pick up this year and have a spillover effect on Korea.

Meanwhile, the world’s top 28 economic institutes were more pessimistic, as their average forecast stood at 3.5 percent.

HSBC, which released the lowest forecast of 3.1 percent, said that the weakness of the yen will continue to impede the price competitiveness of Korean export companies.

The recent landslide victory of the Japanese Liberal Democratic Party will also add further momentum to Prime Minister Shinzo Abe’s so-called Abenomics, according to the bank’s economist Ronald Man.

Going back to the positive economic factors, both optimists and pessimists seem to agree on some level that global economy will take an upturn this year.

The International Monetary Fund, which is usually conservative in its economic forecasts, said that the global growth rate would be 4 percent this year, up 0.6 percent from last year.

But experts also pointed out pending problems such as household debt and the possibility of deflation.

“The household debt issue may not be solved merely by boosting the money supply in the market,” said Hongik University professor Chun Sung-in.

“The government should interfere more actively and inject public funds in order to solve the problem.”

The inflation rate mostly remained in the 1 percent range last year and most analysts suggest that the figure will be around 1.5 percent this year.

“Considering that the tobacco price hike takes up 0.6 percent, the actual inflation falls below the 1 percent line, which may be seen as deflation,” said Yoon Chang-yong, an economist at Shinhan Investment.

The Bank of Korea’s mid-term inflation target is 2.5-3.5 percent.

By Bae Hyun-jung (tellme@heraldcorp.com)