Bank of Korea raises 2020 GDP growth forecast to -1.1%, keeps rates steady
- 3 years ago
한은, 올해 성장률 전망 -1.3% → -1.1% 상향조정…기준금리는 0.5% 동결
The Bank of Korea has raised its growth forecast for the Korean economy for both this year and next year.
It's now calling for growth in 2020 of minus 1-point-1 percent, which is an improvement of two tenths of a percent from its previous forecast.
The BOK has also decided to keep its benchmark interest rate at a record low of half a percent.
Kim Jae-hee has the details.
The Bank of Korea has raised its forecast for economic growth for both this year and next year.
This year, the BOK expects GDP to shrink one-point-one percent, which is an improvement of point-two percentage points from its previous forecast.
For next year, the forecast is now three percent, also up up two tenths of a percentage point from the forecast made in August.
The BOK governor explained that the domestic economy is expected to see a modest recovery as exports improve and investment grows.
"This year's growth outlook was revised up... thanks to better-than-expected exports and facilities investment. Next year, the local economy is expected to grow 3 percent... on improvements in exports and continued investment as the global economy gradually recovers. This forecast was made under the assumption that the spread of COVID-19 stabilizes by the middle or latter part of next year."
But the central bank chief noted that the economy is not yet fully on course for a recovery... and is still at risk of COVID-19 spreading further.
He also warned that the current third wave of the virus could have a greater impact on the economy than the second wave in August and September, and left open the possibility that the economic outlook could change depending on how the virus situation unfolds, a view shared by other economists.
"This year's economic growth could fall short of expectations, depending on how long the third wave of COVID-19 lasts. There is uncertainty surrounding the resurgence, the development and distribution of vaccines and the virus situation overseas."
Amid the uncertainty, the central bank on Thursday kept its benchmark interest rate unchanged at a record low of point-five percent.
The rate has been cut twice this year, by a half percentage point in March and by a quarter percentage point in May.
The BOK is sticking with an accommodative policy to offset the economic hit from the virus,... but it's not cutting further... to avoid fueling the rise in household debt and property prices.
Kim Jae-hee, Arirang News.
The Bank of Korea has raised its growth forecast for the Korean economy for both this year and next year.
It's now calling for growth in 2020 of minus 1-point-1 percent, which is an improvement of two tenths of a percent from its previous forecast.
The BOK has also decided to keep its benchmark interest rate at a record low of half a percent.
Kim Jae-hee has the details.
The Bank of Korea has raised its forecast for economic growth for both this year and next year.
This year, the BOK expects GDP to shrink one-point-one percent, which is an improvement of point-two percentage points from its previous forecast.
For next year, the forecast is now three percent, also up up two tenths of a percentage point from the forecast made in August.
The BOK governor explained that the domestic economy is expected to see a modest recovery as exports improve and investment grows.
"This year's growth outlook was revised up... thanks to better-than-expected exports and facilities investment. Next year, the local economy is expected to grow 3 percent... on improvements in exports and continued investment as the global economy gradually recovers. This forecast was made under the assumption that the spread of COVID-19 stabilizes by the middle or latter part of next year."
But the central bank chief noted that the economy is not yet fully on course for a recovery... and is still at risk of COVID-19 spreading further.
He also warned that the current third wave of the virus could have a greater impact on the economy than the second wave in August and September, and left open the possibility that the economic outlook could change depending on how the virus situation unfolds, a view shared by other economists.
"This year's economic growth could fall short of expectations, depending on how long the third wave of COVID-19 lasts. There is uncertainty surrounding the resurgence, the development and distribution of vaccines and the virus situation overseas."
Amid the uncertainty, the central bank on Thursday kept its benchmark interest rate unchanged at a record low of point-five percent.
The rate has been cut twice this year, by a half percentage point in March and by a quarter percentage point in May.
The BOK is sticking with an accommodative policy to offset the economic hit from the virus,... but it's not cutting further... to avoid fueling the rise in household debt and property prices.
Kim Jae-hee, Arirang News.