Subscribe
E-Paper
 |
| gettyimagesbank |
Korea's two leading private think tanks have revised down the country's 2019 economic growth outlook, adding to the growing worries that Asia's fourth-largest economy is facing a steeper-than-expected slowdown, Sunday.
In a quarterly review, the Korea Economic Research Institute (KERI) said Korea's economy will grow 1.9 percent from a year earlier in 2019, an estimate 0.3 percentage points lower from 2.2 percent made in June.
June's estimate had already been revised down 0.2 percentage points from 2.4 percent.
KERI is supervised by the Federation of Korean Industries, the biggest business lobby in Korea representing most of the large conglomerates here.
It said the bleaker outlook came as a mixture of weak consumption and corporate investment amid a sharp drop in exports over the past few months.
Chief among the factors is, it added, the overall deteriorating trade terms of Korea's trading partners amid a global economic slowdown triggered by the drawn-out trade feud between the U.S. and China.
Adding to the heightened uncertainty is trade woes following Japan's export restrictions on key materials needed for Korea to make semiconductors and displays.
An "extremely" stagnant corporate investment sentiment in the construction and facility sector, as well as dampened private consumption will drag down growth, it said.
Similarly, the Hyundai Research Institute (HRI) said the country's economy will expand 2.1 percent from a year earlier in 2019, 0.4 percentage points lower than the previous estimate of 2.5 percent made in June.
Despite the government's increase in fiscal spending, HRI said, the private sector remained close to "non-responsive," leading to the continued slowdown.
Strong government measures are required, it suggested, to prevent deflation, a decline in the general prices of goods and services, known as a vicious cycle that could drag down the economy.
Chief among the determinant to revitalize the Asia's fourth-largest, export-reliant economy will be global economic recovery and domestic consumption, the HRI said.
