South Korea cuts growth outlook, holds interest rate at record low
Central bank chief says economy expected to continue recovery phase
South Korea's central bank cut its economic growth forecast for the fourth time this year on Thursday and left interest rates at a record low, as a lengthening export slump overshadowed a pick-up in domestic activity.
“The local economy is expected to continue its recovery phase, centred around domestic consumption,” Bank of Korea governor Lee Ju-Yeol said. “However, uncertainties surrounding the path to recovery remain high.”
The Bank of Korea shaved its economic growth forecast for this year to 2.7 per cent, from the 2.8 per cent it had predicted back in July.
It is the fourth reduction since the start of the year, when it had estimated 3.9 per cent growth.
The bank also left its key interest rate unchanged at 1.5 per cent – a decision that had been widely expected following a cut of 25 basis points in June.
Bank policymakers have slashed borrowing costs three times in the past year, citing the weak global economic outlook and sagging exports, which account for about half of South Korea's gross domestic product.
