The Bank of Korea has cut its growth outlook for the Korean economy this year by point-three percentage points to barely over 3 percent.
Central bank governor Lee Ju-yeol said that the downgrade is due to weak exports and slow growth.
"The lowered forecast comes from a weaker-than-expected GDP in the last quarter of 2014 and lower consumer price growth in the first quarter of this year."
The central bank also slashed its inflation forecast
for this year to less than 1-percent, from 1.9 percent in January, with low global oil prices that are expected to fall even further.
The central bank governor said that, so far, the domestic economy has shown few signs of improvement, but maintained that consumer sentiment "has not yet recovered."
But the central bank left its key rate unchanged at 1.7-5 percent, with Lee saying that the current rate is low enough to prop up economic growth.
Some experts, however, say that there is room for the BOK to do more.
"The current rate is not low enough to boost the domestic economy. The central bank should take action by lowering it even more, if the actual growth rate fails to meet the bank's outlook."
( . .)
"Not everyone agrees. Some experts say that economic recovery can’t be driven by the interest rate alone, and long-term structural reforms are also needed to help stimulate domestic spending and investments.
Shin Se-min, Arirang News."