July 13, 2018 12:59
The Bank of Korea has slashed its growth outlook for the country from three to 2.9 percent as exports sputter.
The BOK said Thursday that it expects the Korean economy to grow 2.9 percent in the first half and 2.8 percent in the second.
The central bank had originally set this year's growth projection at three percent but lowered it to match the outlook of the state-run Korea Development Institute.
BOK Governor Lee Ju-yeol said, "Uncertainties are rising, including worsening export conditions due to an expanding trade dispute between the U.S. and China."
The bank also kept the base interest rate unchanged at 1.5 percent despite increases by the U.S. central bank, raising pressure on foreign capital to exit the Korean markets.
The U.S. raised the key interest rate twice this year to two percent, but the BOK had no choice given the gloomy economic outlook, according to analysts.
The trade dispute between the U.S. and China has prompted the Korean won to weaken while stocks have dropped. Household debt growth has slowed but remains steep, leaving the BOK little room to raise the base interest rate.
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