S Korea's central bank cuts 2014 growth forecast to 3.8%

10 July 2014 05:22 Source:ICIS News

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.

By Nurluqman Suratman