Seoul: The Bank of Korea (BOK) on Tuesday sharply lowered its outlook for South Korea's economic growth this year to 1.5 percent amid slowing export growth and weak domestic demand. The latest figure marks a 0.4 percentage-point fall from its projection presented in November.
According to Yonhap News Agency, the country's potential growth rate is at 2 percent, and this year may mark the first time ever that the country's yearly growth rate falls below this level. The BOK's latest projection is more pessimistic than those of other major institutions. The finance ministry earlier forecast the economy to grow 1.8 percent this year, and the Organization for Economic Cooperation and Development (OECD) presented a 2.1 percent expansion.
Presenting a bleaker forecast, the BOK lowered its key rate by a quarter-percentage point to 2.75 percent. As for inflation, the BOK maintained its estimate for 2025 at 1.9 percent.