Seoul growth outlook cut by OECDThe Organization for Economic Cooperation and Development (OECD) on Thursday slashed its growth outlook for Korea’s economy this year to 2.1 percent amid a slowdown in global trade.
The OECD’s interim outlook represented a drop from its previous forecast of 2.4 percent in May. It said the Korean economy would grow 2.3 percent in 2020, also slower than its previous forecast of 2.5 percent.
Growth in Korea “has moderated by more than expected this year, in part due to persistently weak global trade and soft import demand in China,” the OECD said in its report. “These factors are expected to persist, but recent steps to ease macroeconomic policies should support domestic demand growth in 2020.”
Korea -- a small, open economy -- depends heavily on exports and foreign capital investment, a situation that makes it vulnerable to external shocks.
The latest downward revision came amid concerns South Korea may not achieve its revised growth target this year as exports slowed amid an ongoing trade conflict between the United States and China and more recently a trade row between Korea and Japan.
In July, Korea cut its economic growth outlook for this year to between 2.4 percent and 2.5 percent from its previous forecast of between 2.6 percent and 2.7 percent in December, citing weak exports and sluggish investment.
Global rating agency Standard & Poor’s also sharply slashed its growth forecast for Korea’s economy this year to 2 percent in July from its previous estimate of 2.4 percent in April, citing rising uncertainty about the global trade outlook and weaker consumption.