A major state-run think tank in South Korea will likely lower its growth projection for the country as worsening market situations at home and abroad are clouding the outlook for Asia's fourth-largest economy, sources said Friday.
As the Korea Development Institute (KDI) is to announce its growth projection for South Korea in mid-May, sources close to the matter said that the think tank could lower its growth forecast to the 2 percent range for this year. In its December outlook, it revised down the forecast from 3.1 percent to the current 3 percent.
The KDI usually discloses its growth projection for the country twice a year, once in May and the second time in December.
A downward revision could stem from growing worries over global economic conditions compared to six months earlier. In December, the KDI based its growth forecast for Korea on the premise that the global economy will grow 3.6 percent.
The International Monetary Fund, however, has lowered its global growth projections from 3.6 percent back in October to 3.2 percent in April. A global slump bodes ill for South Korea which heavily depends on exports for growth.
The KDI has not confirmed whether it will adjust its growth outlook for the country, though it noted that there are more downward risks than six months earlier.
Major private think tanks and economic research institutes have already adjusted their predictions downward, mostly expecting a growth rate ranging from 2.4 percent to 2.8 percent.
The government currently expects the economy to grow 3.1 percent this year, but many say that it will also likely join others in lowering its relatively rosy outlook in its second-half economy management plan to be unveiled late next month.
"The economy has not deviated much from the growth trajectory that we earlier predicted, but it is still true that the overall downward risks have increased," Finance Minister Yoo Il-ho recently said. "We could revise our growth outlook, if necessary, when we announce the second-half economy management plan." (Yonhap)
