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Bank of Korea (BOK) Lee Ju-yeol presides over a meeting of the BOK’s Monetary Policy Committee. (provided by the BOK)

The Bank of Korea (BOK) lowered its projection for economic growth in 2019 by 0.1 percentage points from 2.7% to 2.6%. The bank also projected a 2020 growth rate of 2.6%.

The BOK’s Monetary Policy Committee (MPC) announced the projections as part of an economic outlook report following a meeting at the BOK’s main building in Seoul’s Jung (Central) district on the morning of Jan. 24. The BOK, which announces economic projections each quarter, has now lowered its growth rate forecast by 0.1 percentage points for three straight quarters, with previous predictions of 2.9% in April of last year, 2.8% in July, and 2.7% in October. Speaking to reporters, BOK Governor Lee Ju-yeol cautioned against reading too much into the situation.

“While we have lowered our projection for this year to reflect weakening global growth, on the whole we anticipate growth at a similar potential growth rate level to last year,” he said.

“While some have expressed concerns about a rapid slowdown in the economy, we do not believe the likelihood of that is very high,” he added.

In terms of sub-areas, facilities investment was expected to recover from its sluggish levels last year and increase during the first half of the year on the strength of growing global semiconductor demand, while construction investment was predicted to continue declining. Private consumption and visible exports were expected to continue rising, but with a drop-off in the rate of increase.

The International Monetary Fund (IMF) previously projected the same 2.6% growth rate as the BOK. The Ministry of Economy and Finance (MOEF) gave a prediction of 2.6–2.7%, while major private domestic economic think tanks have suggested a slightly lower 2.5% and the OECD a rate of 2.8%.

The BOK also slightly lowered its projected increase in the number of employed persons from 160,000 to 140,000. The predicted rise in consumer prices was lowered from 1.7% to 1.4%, while the projected size of the current account surplus was increased from US$62 billion to US$69 billion. The MPC unanimously voted the same day to freeze the benchmark interest rate at its current 1.75%.

By Lee Soon-hyuk, staff reporter

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