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Bank of Korea Governor Lee Seong-tae on Thursday said it would be difficult to achieve economic growth higher than 4.5 percent, and it is likely that it will be lower than that. In a meeting with journalists after the BOK Monetary Policy Committee¡¯s decision to freeze interest rates at 5 percent, Lee said the slowdown of economic growth will continue throughout the year. The BOK at the beginning of the year had predicted 4.7 percent growth.
Lee cited soaring prices of oil and agricultural produce, and the effects of a slowdown of U.S. economy as the reasons for a contraction of the Korean economy this year. ¡°If oil prices continue high and the won weak against the U.S. dollar, the rate of economic growth is expected to decrease and the current account deficit to increase,¡± Lee said. Some financial experts say Lee¡¯s remark is opening the way for an interest rate cut in the future.
Lee also expressed concern about a surge in commodity prices. ¡°The inflation rate from January to April has been higher than the BOK expected, and this trend is likely to last for a while,¡± said Lee. Inflation for this year, Lee said, is likely to go above 3.3 percent, the figure predicted by the BOK.
(englishnews@chosun.com )
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