By Kim Jae-kyoung
The Korea Institute of Finance (KIF) has downgraded its 2019 growth forecast for the Korean economy to 2.1 percent from an earlier prediction of 2.4 percent, citing sluggish exports and investments.
In its report released Tuesday, the private think tank said the country's GDP growth will slow to 2.1 percent this year due to a delay in the private sector's recovery amid unfavorable conditions abroad.
"Private spending is expected to show relatively stable growth but its growth will be affected by worsening consumer sentiment and sluggish spending on durable goods," the institute said.
It expects private spending to grow 2.1 percent this year, but facilities investment is forecast to contract 5.3 percent putting a major drag on economic growth.
"The downturn of the semiconductor industry will weigh on the growth of facilities investment. Also, sagging exports caused by deepening trade disputes will hamper investment growth," it said.
The institute called on the government and the central bank to pursue an optimal mix of accommodative monetary and fiscal policies to forestall a further economic downturn amid growing uncertainties both at home and abroad.