‘US Growth May Fall to 7-Year Low’

U.S. economic growth may fall to a seven-year low this year, hit by the subprime mortgage meltdown, according to the Bank of Korea (BOK) Tuesday.

In a report on the prospects for the U.S. economy, the central bank expects the United States to see a continuous fall in private consumption and construction investment, pulling down its economic growth. However, the economy may pick up slowly in the latter half of the year on a combination of factors, including a rise in exports, additional interest rate reductions, the government's stimulus package and private firms' efforts to resolve non-performing loans, the BOK said.

``Annually, U.S. economic growth is projected to fall to the lowest level since 2001 at a little over 1 percent,'' the report said.

The bank said three factors will decide the fate of the U.S. economy ― the sluggish housing industry; the growing losses of private firms from their investments in subprime-related securities and derivatives; and sluggish consumption amid rising inflation.

In December, the jobless rate soared to 5 percent, the highest since 5.1 percent in September 2005. The economic downturn may make it more difficult for people to get jobs this year, the report said.

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