S. Korea lowers growth forecast to 2.4-2.5%

South Korea’s government on Wednesday revised the growth rate forecast for this year to 2.4-2.5 percent, down 0.2 percentage point from its earlier figure, amid sluggish exports and investments.

It also reiterated the call for the National Assembly to approve the pending supplementary budget bill of 6.7 trillion won ($5.7 billion), vowing to execute 70 percent of the amount within two months.

“The government has devoted maximum efforts for an economic paradigm conversion but uncertainties such as the global economic slowdown and the US-China trade conflict have caused difficulties,” said Deputy Prime Minister and Finance Minister Hong Nam-ki in a press briefing with other economy-related ministers.

Attending the event were ICT Minister Yoo Young-min, Trade Minister Sung Yun-mo, Labor Minister Lee Jae-kap, Land Minister Kim Hyun-mee, SME Minister Park Young-sun, and Financial Services Commission Chairman Choi Jong-ku.

The government also cut down on its forecast for private consumption growth, setting the on-year growth at 2.4 percent, down 0.3 percentage point from the previous estimate.

Equipment investment is likely to turn to a negative growth of 4 percent, dipping from the previously suggested positive growth of 1 percent.

The key task in improving these sluggish investment and growth situations is to pass the 6.7 trillion won extra budget bill as soon as possible and allocate the amount to top priority sectors to revitalize investments and exports, officials said.

Once the budget plan takes effect, the government will add maximum momentum to the stalled investment projects and tax cut plans, executing 70 percent or more of the given budget amount within two months.

By Bae Hyun-jung (tellme@heraldcorp.com)