The Bank of Korea(BOK) has predicted that economic growth of two-point-eight percent this year will be hard to achieve due to repercussions from corporate restructuring, a prolonged slump in exports and a possible U.S. interest rate hike.
According to a BOK report revealed on Tuesday, the Monetary Policy Board unanimously decided to cut the nation’s key interest rate by 25 basis points in a meeting on June ninth, citing such woes. The board also forecast that employment will be further discouraged by downside risks, such as rising oil prices, worsening corporate profitability and the ongoing corporate restructuring drive.
Following its previous move to lower this year’s economic growth outlook to two-point-eight percent in April, the BOK plans to announce another growth revision in its monthly monetary policy meeting on July 14th.
While announcing its economic policy directions for the second half of the year, the Finance Ministry marked down its economic growth goal for this year from three-point-one percent to two-point-eight percent on Tuesday.