12 July 2012 04:39 [Source: ICIS news]
The Bank of Korea’s monetary policy committee cited an “intensifying” of downside risk to growth given that the global economy is recovering at a more moderate pace than originally expected, it said in a statement.
“The committee anticipates that the domestic economy will sustain a negative output gap for a considerable time going forward, due mostly to the increase in euro-area risks and the sluggish economies of its major trading partners,” the central bank said.
The central bank added that the South Korean economy has weakened more than expected, given the deterioration in external demand, with domestic demand staying at low levels.
The country’s economy expanded at an annual rate of 2.8% in the first quarter, with the seasonally-adjusted growth on quarter at 0.9%, according to central bank data.
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