BOK cuts 2025 growth forecast to 1.7% in rare January release
Published: 20 Jan. 2025, 15:19
Updated: 20 Jan. 2025, 16:17
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- SHIN HA-NEE
- [email protected]
![Bank of Korea Gov. Rhee Chang-yong speaks during a news conference following the Monetary Policy Board meeting at the central bank's headquarters in Jung District, central Seoul, on Jan. 16. [JOINT PRESS CORPS]](https://koreajoongangdaily.joins.com/data/photo/2025/01/20/23adcca1-1d71-4442-879b-3e5cc541de24.jpg)
Bank of Korea Gov. Rhee Chang-yong speaks during a news conference following the Monetary Policy Board meeting at the central bank's headquarters in Jung District, central Seoul, on Jan. 16. [JOINT PRESS CORPS]
The Bank of Korea (BOK) lowered its growth forecast for the country’s economy this year from its previous 1.9 percent to 1.6 to 1.7 percent in a rare January projection on Monday, citing political uncertainties surrounding President Yoon Suk Yeol’s martial law declaration and its impact on consumer confidence.
Fourth quarter growth last year is also likely to fall short of the central bank’s November projection of 0.5 percent to come at 0.2 percent or lower.
The yearly growth for 2024, as a result, is estimated at 2 to 2.1 percent, down from the initially expected 2.2 percent.
“Due to the political uncertainties triggered by the martial law incident in December and the following contraction in economic sentiment, economic growth this year is estimated to decrease by 0.2 percentage points,” said the central bank in its report.
BOK Gov. Rhee Chang-yong shared the same projection during a news conference following a rate-setting meeting on Jan. 16, saying, “The drop in domestic demand, especially regarding contractions in consumption and construction, has been more significant than we initially expected.”
While the BOK typically announces its growth projection four times a year in February, May, August and November, the central bank released a rare January projection on Monday ahead of its official outlook adjustment next month.
“We believe that sharing [the BOK’s] analysis on the economic implications of an unexpected rise in political risks following the November projection will be able to help economic entities in decision-making and communication on monetary policies before the official projection is announced in February,” said the bank said.
BY SHIN HA-NEE [[email protected]]
with the Korea JoongAng Daily
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