South Korea's economy is able to grow 5 percent in 2008 on the back of expanding consumption and corporate investment, said a report by a South Korean research institute.

    At a luncheon with foreign correspondents in Seoul, the Samsung Economic Research Institute, one of the leading economic research institutes in the country, released an outlook for South Korea's economy in 2008.

    The economic growth is to reach 5.2 percent in the first half next year, thanks to rising stocks and wages, which will boost consumption, the report said.

    The economic growth will slow down to 4.8 percent in the second half and mainly driven by corporate investment, the report said.

    It expected that the country's current account balance in 2008 will run a deficit of 2.9 billion U.S. dollars, ending 10 consecutive years of surplus.

    The exports in 2008 are expected to exceed 410.9 billion U.S. dollars with a double-digit growth rate of 11 percent when compared with that in 2007, while the imports are forecast to rise 12.8 percent at 395.1 billion U.S. dollars, it said.

    The report said the policy direction of South Korea in 2008 should be focused on maintaining the current recovery trend after a new administration takes office in February next year.

    Soaring oil prices, the weakening U.S. dollar and global financial turmoil stemming from the U.S. subprime mortgage woes posed growing threats to world economic growth and those factors show no signs of receding quickly in 2008, the report said.