Bank of South Korea: No Need to Cut GDP Growth Forecasts

Published September 23rd, 2020 - 06:30 GMT
Bank of South Korea: No Need to Cut GDP Growth Forecasts
Though health authorities temporarily eased those measures for two weeks from Sept. 14, they will return to tougher guidelines again from Sept. 28 during the Chuseok holiday. (Shutterstock)
Highlights
In late August, the BOK sharply downgraded its 2020 growth outlook to a 1.3% contraction - the biggest contraction in more than two decades - from its previous prediction of 0.2% decline.
South Korea’s central bank said on Tuesday it sees no need to downgrade its current economic growth projections, even after the government imposed tougher social distancing measures to curb a fresh spike in coronavirus cases.

“South Korea’s economy is currently on track to meet (the Bank of Korea’s) growth forecasts,” Kim Woong, director-general of the bank’s research department said, according to Reuters.

“There haven’t been any (economic) indicators since the bank’s previous forecast that particularly requires any change,” Kim said.

In late August, the BOK sharply downgraded its 2020 growth outlook to a 1.3% contraction - the biggest contraction in more than two decades - from its previous prediction of 0.2% decline.

The government, since then, imposed unprecedented social distancing measures such as banning onsite dining after 9 p.m. and limiting coffee and bakery franchises to takeout and delivery, which heavily restricted social activities and damaged businesses.

Though health authorities temporarily eased those measures for two weeks from Sept. 14, they will return to tougher guidelines again from Sept. 28 during the Chuseok holiday.

“The recovery in private consumption will be slower than expected going forward,” Kim said, adding the coronavirus could change consumer behavior and industrial structure if it lasts longer.


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