Woori Financial Research Institute Lowers This Year's Economic Growth Forecast to -0.5%

[Asia Economy Reporter Kwon Haeyoung] Woori Financial Management Research Institute has revised its annual economic growth forecast for this year downward from 0.5% to -0.5%.

On the 16th, Woori Financial Management Research Institute stated that exports were weaker than initially expected, and the second quarter Gross Domestic Product (GDP) is projected to record -2% compared to the previous quarter. The first quarter GDP growth rate was -1.4%.

Exports are expected to plunge 6.7% in the second quarter due to simultaneous recessions in advanced and emerging countries, and facility investment is also expected to decrease by 7% due to reduced production and lower operating rates caused by weak external demand. Construction investment is forecasted to decline by 2.9%. Private consumption and government consumption are expected to increase by 3.1% and 4.3%, respectively.

GDP is expected to grow by an average of 1.3% per quarter in the second half of the year, centered on consumption and exports, following a decline in the first half. Woori Financial Management Research Institute predicted, "Exports will rebound supported by the recovery of consumer sentiment, easing of employment sluggishness leading to increased private consumption, resumption of economic activities in major countries, and the visible effects of monetary and fiscal policies."

The economic growth rate for this year is forecasted at -0.5%. This is higher than the International Monetary Fund's (-1.2%), the three major credit rating agencies' (-1.2%), and global investment banks' (0.9%) forecasts.

The Consumer Price Index (CPI) inflation rate is expected to rise to 0.5%, up from 0.4% last year, and the number of employed persons is projected to decrease by 52,000 compared to the previous year, showing a significant decline from last year's increase of 301,000. The current account surplus is expected to expand to $62.9 billion from $60 billion last year. The integrated fiscal balance is forecasted to show a deficit of 54 trillion won, a substantial increase from last year's deficit of 12 trillion won.

This content was produced with the assistance of AI translation services.