Ma­jor For­eign IBs Cut S. Korea’s Growth Outlook


SEOUL (Dis­patches) - Ma­jor for­eign in­vest­ment banks re­vised down their fore­casts for South Korea’s eco­nomic growth for this year and 2019, cit­ing un­fa­vor­able con­di­tions both at home and abroad, a re­port showed Thurs­day.

Ac­cord­ing to the re­port by the Korea Cen­ter for In­ter­na­tional Fi­nance, the fore­cast by nine ma­jor global IBs as of end-Novem­ber av­er­aged 2.7 per­cent for this year and 2.6 per­cent for next year, down 0.1 per­cent­age point each from the fig­ures pre­sented a month ear­lier.

No­mura, for ex­am­ple, down­graded South Korea’s growth pro­jec­tion for this year from 2.9 per­cent to 2.7 per­cent, and trimmed the fig­ure for 2019 to 2.5 per­cent from 2.7 per­cent, cit­ing re­struc­tur­ing in ma­jor in­dus­tries and tighter la­bor con­di­tions.

At the end of Jan­uary, they ex­pected Asia’s fourth­largest econ­omy to ex­pand 2.9 per­cent this year and 2.8 per­cent for 2019 on av­er­age. The global en­ti­ties’ fore­cast is con­ser­va­tive com­pared with those by lo­cal state en­ti­ties. The Bank of Korea put its growth outlook for this year and 2019 at 2.7 per­cent each.

The for­eign banks also painted a bleaker pic­ture for the global eco­nomic econ­omy. As of end-Novem­ber, they ad­justed down this year’s av­er­age fore­cast to 3.8 per­cent and put next year’s fig­ure at 3.6 per­cent, which is 0.1 per­cent­age point lower com­pared to the pro­jec­tions made the pre­vi­ous month. “The po­ten­tial global eco­nomic re­ces­sion would pose a risk to the South Korean econ­omy which would not be eased in a short pe­riod of time,” the cen­ter said, call­ing for “con­ser­va­tive ap­proaches,” par­tic­u­larly around the end of the year when the over­all liq­uid­ity dwin­dles.

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