SINGAPORE (ICIS)--South Korea’s central bank on Thursday cut its economic growth forecast for 2014 to 3.8%, marking a decrease of 0.2 percentage points from a previous estimate of 4% made in April.
The Bank of Korea in a statement adjusted its inflation outlook for the year to 1.9% from the previous estimate of 2.1%.
The central bank also kept its policy interest rate steady at 2.50%.
“In Korea, despite exports having maintained their buoyancy the committee [Monetary Policy Committee of the Bank of Korea] appraises economic growth to have slowed somewhat, as domestic demand has slackened due largely to the impacts of the Sewol ferry accident,” the central bank said.
“[The] Committee expects that the negative output gap in the domestic economy will gradually narrow going forward, although its pace of narrowing will be moderate,” it added.