Xinhua, Seoul :
South Korea’s government on Wednesday revised down its 2018 growth forecast for the economy on worry about the U.S. protectionist moves that can trigger a global trade war.
Real gross domestic product (GDP), adjusted for inflation, was forecast to grow 2.9 percent in 2018, down from the estimate of 3.0 percent expansion announced six months earlier, according to the Ministry of Strategy and Finance.
It was on par with the growth estimate of the Bank of Korea (BOK), which also lowered its forecast by 0.1 percentage point earlier this month. The South Korean economy expanded 3.1 percent last year.
The ministry picked the U.S. protectionist moves as the main reason for the downward revision. Higher U.S. import tariffs would encourage other foreign governments to retaliate against U.S. companies, boosting trade conflict and reducing global trade.
The South Korean economy, which depends heavily on exports for growth, was expected to be hit hard by the trade conflict, especially in the second half of this year.
Exports were forecast to climb 5.3 percent this year, much lower than a 15.8 percent expansion last year.
Outlook for import growth was set at 11.2 percent amid rising crude oil price. It was revised up from a 6.0 percent gain estimated six months earlier.
Consumer price inflation was projected at 1.6 percent, down from the previous forecast of 1.7 percent. Despite the expensive crude oil, farm goods prices were predicted to stay low.
The ministry also selected higher crude oil price as a downside risk factor to the economy as it can restrict growth of export and private consumption in the second half.
Private consumption, the other main pillar for growth, was projected to rise 2.7 percent this year, down from a 2.8 percent increase estimated six months earlier.
South Korea’s government on Wednesday revised down its 2018 growth forecast for the economy on worry about the U.S. protectionist moves that can trigger a global trade war.
Real gross domestic product (GDP), adjusted for inflation, was forecast to grow 2.9 percent in 2018, down from the estimate of 3.0 percent expansion announced six months earlier, according to the Ministry of Strategy and Finance.
It was on par with the growth estimate of the Bank of Korea (BOK), which also lowered its forecast by 0.1 percentage point earlier this month. The South Korean economy expanded 3.1 percent last year.
The ministry picked the U.S. protectionist moves as the main reason for the downward revision. Higher U.S. import tariffs would encourage other foreign governments to retaliate against U.S. companies, boosting trade conflict and reducing global trade.
The South Korean economy, which depends heavily on exports for growth, was expected to be hit hard by the trade conflict, especially in the second half of this year.
Exports were forecast to climb 5.3 percent this year, much lower than a 15.8 percent expansion last year.
Outlook for import growth was set at 11.2 percent amid rising crude oil price. It was revised up from a 6.0 percent gain estimated six months earlier.
Consumer price inflation was projected at 1.6 percent, down from the previous forecast of 1.7 percent. Despite the expensive crude oil, farm goods prices were predicted to stay low.
The ministry also selected higher crude oil price as a downside risk factor to the economy as it can restrict growth of export and private consumption in the second half.
Private consumption, the other main pillar for growth, was projected to rise 2.7 percent this year, down from a 2.8 percent increase estimated six months earlier.
