BOK chief hints at further slashing growth outlook
The head of Korea’s central bank has painted a dark picture for the Korean economy by noting the local economy may yet again grow at a slower pace than earlier expected amid increased downside risks.
In July, the Bank of Korea slashed its growth estimate for Asia’s fourth-largest economy to 2.2 percent from the 2.5 percent forecast three months earlier. The revised outlook marks a sharp fall from the 2.6 percent year-on-year expansion predicted in January.
The central bank will offer its final growth outlook for the year in November.
“It has been less than a month since the last monetary policy board meeting, held Aug. 30, but it seems there have been many changes at home and abroad even in such a short period of time,” Bank of Korea (BOK) Governor Lee Ju-yeol said while meeting with reporters Friday.
The top central banker said the scheduled resumption of trade negotiations between the U.S. and China, along with the passage of a bill by Britain to avoid a no-deal Brexit, may have created some positive momentum.
“However, it is still difficult to predict which direction the U.S.-China trade dispute and Brexit will move,” Lee said.
“It has been two months since (the BOK) offered its latest growth outlook in July, and considering such conditions, I worry that downside risks may have become greater over the past two months,” he added.
“We will have to see until then, but I will say it is not easy to meet the 2.2 percent target,” the BOK chief said.
His remarks also come about three weeks before the BOK’s monetary policy board holds its next rate-setting meeting on Oct. 16.
The board kept the base rate frozen at 1.5 percent in its August meeting, about a month after it slashed the key rate by a quarter percentage point in its first rate cut in three years.