According to the financial sector on the 21st, UK-based Capital Economics (CE) lowered its forecast for South Korea's economic growth rate this year from the previous 1.1% to 1% in a report released on the 19th.
The research institute said, "We believe that South Korea's economic growth rate will be limited to 1% this year due to the political crisis and the slump in the real estate sector, which is a figure far below the market forecast." "Due to this economic slowdown, the Bank of Korea will lower the key interest rate by 1 percentage point this year, which is a larger drop than other analysts expect."
It is an analysis that the Bank of Korea will inevitably lower the current interest rate of 3% to 2% in order to boost the economy. If it is 0.25% points at a time, it will be lowered four times.
The average growth rate forecast presented by major overseas investment banks (IBs) this year is around 1.6%. Capital Economics' forecast is 0.2 percentage points lower than the lowest of the IBs, JP Morgan's 1.2%.
The Korea Development Institute (KDI) lowered its growth rate forecast for this year from 2.0% to 1.6% on the 11th, and the Bank of Korea will announce its revised economic outlook on the 25th.
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