The Bank of Korea: "US-China Trade Conflict and Prolonged COVID-19 Pose Downside Risks to Growth"

Bank of Korea 'Recent Domestic and International Economic Trends'

[Asia Economy Reporter Kim Eun-byeol] The Bank of Korea announced on the 16th that due to the prolonged impact of the novel coronavirus disease (COVID-19), this year's economic growth rate is likely to fall below the May forecast of -0.2%.

In the 'Recent Domestic and International Economic Trends' report released that day, the Bank's Research Department stated, "Future growth trends will be largely influenced by the domestic and international developments of COVID-19," adding, "This year's growth rate may fall short of the forecast." Initially, in the economic outlook released in May, the Bank of Korea had projected this year's growth rate at -0.2% and next year's at 3.1%.

The Bank explained the reason for expecting the growth rate to underperform the forecast by saying, "Although the slump in private consumption has somewhat eased, exports, especially in the non-IT sector, have significantly declined due to the global spread of COVID-19."

Additionally, potential downside risks going forward include ▲ prolonged COVID-19 crisis ▲ intensified US-China trade conflicts ▲ delayed recovery in the semiconductor industry. However, the rapid normalization of the Chinese economy and strengthened domestic and international policy responses are seen as factors that could boost the growth rate.

The consumer price inflation rate is expected to remain at a low level in the early 0% range. This is because demand-side inflationary pressures are weak, and international oil prices are expected to be lower than last year.

The current account balance is projected to maintain a surplus trend.

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