Growth expectations down again for KoreaFitch Solutions downgraded its outlook for Korea’s 2020 economic growth to 2.2 percent from 2.5 percent Wednesday, citing fallout from the ongoing coronavirus outbreak.
The latest forecast from global credit appraiser Fitch Group’s consultancy arm is lower than the Bank of Korea’s prediction of 2.3 percent expansion for this year.
The outbreak of the coronavirus in China and around the world is likely to exert considerable downward pressure on Asia’s fourth-largest economy, including exports, production and distribution, Fitch Solutions said.
Anticipating China’s economic slowdown, the consultancy predicted Korea’s exports to grow 1.2 percent on-year in 2020, down from an earlier estimate of 1.5 percent.
China is Korea’s largest trading partner, with slightly over 25 percent of the smaller country’s overseas shipments heading to the world’s second-largest economy.
Korea’s economy grew 2 percent in 2019, the slowest expansion in a decade, following a lengthy trade war between the world’s two largest economies.
Fitch said Korea’s travel and tourism sector is expected to take a considerable hit from the new coronavirus, as one-third of foreign visitors to Seoul come from China.
The consulting firm revised Korea’s private consumption growth to 2.2 percent from 2.4 percent.