OECD lowers Korea’s growth outlook to 3%

The Organization for Economic Cooperation and Development said Wednesday it has revised its outlook on Korea’s 2015 GDP growth down to 3 percent from its earlier projection of 3.8 percent.

In its initial outlook a year back, the Paris-based organization forecast that Korea’s growth would reach 4.2 percent this year. Following the cut by 0.4 percentage point in November 2014, it has again lowered its outlook by 0.8 percentage point.

In its June 3 report, the OECD also revised its projection for the nation’s 2016 growth down by 0.5 percentage point from the earlier 4.1 percent to 3.6 percent.

It cited mounting household debt, still lackluster private consumption, the Korean currency’s appreciation ― against the Japanese yen ― and sagging exports for its forecast revision.

It advised that the Korean policymakers should prioritize seeking higher growth and productivity by inducing active corporate investments via deregulations.

The International Monetary Fund has lowered its outlook on the nation’s GDP growth from 3.7 percent to 3.3 percent, the Korea Development Institute from 3.5 percent to 3 percent, and the Bank of Korea from 3.4 percent to 3.1 percent.

The Finance Ministry is also poised to revise its growth target down to below 3.5 percent from its earlier projection of 3.8 percent.

By Kim Yon-se (kys@heraldcorp.com)