S. Korea's central bank revises down growth projection to 2.9%

Lim Chang-won Reporter Posted : 2018-07-12 13:48 Updated : 2018-07-12 13:48
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SEOUL -- South Korea's central bank revised down this year's economic growth forecast to 2.9 percent from an earlier projection of 3.0 percent, citing rising uncertainties especially over a trade war between the world's two largest economies.

The revised projection was released after the Bank of Korea (BOK) kept its prime interest rate for July unchanged at 1.5 percent.

BOK governor Lee Ju-yeol said the domestic economy is expected to continue its solid growth while the inflationary pressure will not be high. Lee expressed concern about growing uncertainty in the global financial market, but he ruled out any sudden capital flight, citing South Korea's steady economic growth and sound fundamentals.

Concerns are growing over slow exports and an intensifying Sino-U.S. trade dispute after the United States unveiled an additional list of tariffs on $200 billion worth of Chinese goods.

"China's economy may slow down and the global economy may shrink," Finance Minister Kim Dong-yeon told a meeting of economic officials. "We can not rule out the possibility of a serious downside risk to our economy, which is highly reliant on foreign countries."

"The job situation is very serious," Kim said. South Korea's employment has been sluggish and household debt has been on the steady rise to hit a record high of 1,468 trillion won ($1.36 trillion) in the first quarter of this year.