BOK chief says growth is set for a rebound

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BOK chief says growth is set for a rebound

Korea’s economic growth will likely rebound down the road, but the escalating trade dispute between the United States and China continues to present challenges to Asia’s fourth-largest economy, Seoul’s central bank chief said Monday.

Bank of Korea (BOK) Gov. Lee Ju-yeol said the country will maintain a close watch on how the U.S.-China trade dispute unfolds.

“We will keep an eye on the effect it has [on the local economy],” Lee said while meeting with reporters.

Korea’s gross domestic product (GDP) unexpectedly contracted 0.3 percent in the first quarter from three months earlier, due to a slowdown in exports and less demand from China.

“The GDP contracted in the first quarter, but the growth rate will recover once the sluggish exports improve and government spending begins to be executed in the second quarter,” the top central banker said.

The government has said its first-quarter expenditures reached a record high this year under its stimulus plan, which calls for front-loading at least 70 percent of annual spending in the first half.

The BOK has partly blamed an apparent time gap between a government decision to spend and the actual execution of budgets for the slowest quarterly growth in a decade.

Meanwhile, Lee dismissed reports of a possible currency redenomination, saying the bank has neither reviewed the possibility nor has any plans to push for such a move.

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