S. Korea central bank chief: 2019 GDP growth likely to miss forecast

This article is more than 12 months old

Sep 30, 2019 06:00 am

INCHEON, SOUTH KOREA South Korea's central bank chief said economic growth this year would likely miss the bank's 2.2 per cent forecast, while declining to comment on market expectations for an interest rate cut in October, which would be its second in three months.

"We are due to unveil a new forecast in November and we will have to see the situation at that time, but it will be tough to achieve the 2.2 per cent growth forecast previously," Bank of Korea governor Lee Ju-yeol told reporters on Friday.

In July, the central bank trimmed its forecast for economic growth this year to 2.2 per cent from 2.5 per cent previously and cut the policy interest rate by 25 basis points to 1.5 per cent, its first cut in three years.

But the new forecast was already above projections by private-sector organisations, set as low as 1.4 per cent, and economic indicators since then have showed increasing negative risks to Asia's fourth largest economy.

South Korea, which relies heavily on exports such as memory chips for expansion, is hit by the US-China trade war.

Mr Lee declined to say whether the next revision would be a downgrade or whether he agreed with market expectations that the central bank would further cut the policy rate this year.