The International Monetary Fund (IMF) downgraded its growth outlook for South Korea for this year to 2.8 percent from 3.0 percent with concerns about negative effects from escalating trade tensions between the United States and China and volatile financial markets of emerging economies.
The IMF also revised down its growth forecast for the country for next year to 2.6 percent, down 0.3 percentage point from its earlier estimate.
In the World Economic Outlook report released by the IMF on Tuesday (local time), the IMF dragged down its forecasts for Korea’s growth this year and next, compared with the figures it predicted eight months ago.
The agency said its downward revisions reflect the negative effect of the trade measures implemented since April on activity in China and other economies in emerging Asia in line with the U.S. President Donald Trump’s protectionist policies.
Tighter financial conditions in advanced economies also could cause disruptive portfolio adjustments, sharp exchange rate movements, and further reductions in capital inflow to emerging markets with weaker fundamentals and higher political risk, it added.
Separately, the IMF predicted that the global economy would grow at 3.7 percent in 2018 and 2019, down 0.2 percentage point from its earlier estimates in July.
By Lee Yu-sup and Lee Ha-yeon
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