South Korean President Yoon Suk-yeol gives a speech on the government budget at the National Assembly in Seoul, South Korea, Oct 31, 2023. (PHOTO / POOL / AP)

SEOUL - South Korean President Yoon Suk-yeol said on Tuesday the economy in 2024 would exceed the potential growth rate after picking up pace in the second half of 2023, and pledged closer ties with the United States to bolster crisis management capabilities.

The government is closely monitoring the economic and security situations and prepared to take response measures in a timely manner, Yoon said in a speech to parliament on next year's proposed budget.

"The pace of economic growth will continue to expand in the second half of the year as forecast earlier ... and by next year it will recover beyond the level of the potential growth rate and record a higher rate than major countries," he said.

South Korea's potential growth rate - the maximum economic growth that can be achieved without triggering inflationary pressure - is estimated to be around 2 percent, policymakers have said

South Korea's potential growth rate - the maximum economic growth that can be achieved without triggering inflationary pressure - is estimated to be around 2 percent, policymakers have said.

Gross domestic product grew 0.6 percent in the July-September quarter from three months earlier, Bank of Korea data showed last week, the same pace as the prior quarter and beating a median 0.5 percent increase forecast in a Reuters survey.

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In a Reuters survey conducted early this month, economic growth was forecast to slow to 1.2 percent in 2023 from 2.6 percent in 2022, followed by a recovery to 2.1 percent in 2024.

The forecasts compare with the government's projection of 1.4 percent growth this year and 2.4 percent next year.

The government in August unveiled its 2024 budget plan that included the smallest increase in two decades amid weakening tax revenue due to slower economic growth.

The 656.9 trillion won ($487 billion) government expenditure plan for 2024 was 2.8 percent higher than 2023.

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Yoon again stressed the importance of fiscal discipline to help stabilize domestic inflation and sustain the country's credit ratings.

Yoon highlighted his priority on maintaining security ties with the United States and other allies and said economic security cooperation with Washington could bolster the country's crisis management capabilities.