Korea's central bank expects expanded current account surplus for this year
The Bank of Korea on Thursday raised its outlook for the current account surplus this year to 63 billion U.S. dollars, up 10 billion dollars from its July estimate.
This comes amid a gradual recovery in exports, which rose each of the past three quarters compared to the same quarter last year.
Weak demand in the domestic economy also led to a slowdown in imports.
Although the central bank expects next year's current account surplus to reach 45 billion dollars, smaller than this year's forecast, experts say it's still a healthy number.
"It's mainly coming from the import increase, which is actually good. As domestic market recovers import increases."
With regard to the overall growth outlook for the Korean economy next year, the central bank cut its forecast to 3.8 percent, down 0.2 percentage points from its earlier outlook.
Despite the cut, the number is still greater than this year's growth forecast of 2.8 percent, suggesting that Korea will be able to maintain a moderate recovery next year.
The central bank's revised down outlook came after the International Monetary Fund cut its growth forecast for the global economy.
"The Korean economy is heavily reliant on exports, meaning that it reacts very sensitively to external factors. It would have been very odd if the central bank of a country like Korea hadn't changed its growth forecast in response to the IMF's revised outlook."
The BOK governor added that the uncertainty surrounding the U.S. budget standoff and the planned tapering of the Federal Reserve's bond-buying stimulus pose downside risks.
"Korea's central bank, meanwhile, kept its wait-and-see stance for the fifth straight month in October, leaving its key interest rate unchanged at two-and-a-half percent.
Hwang Ji-hye, Arirang News."
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