S. Korean gov't revises down 2018 growth forecast to 2.9 pct

Source: Xinhua | 2018-07-19

South Korea's government on Wednesday revised down its 2018 growth forecast for the economy on worry about the U.S. protectionist moves that can trigger a global trade war.

Real gross domestic product (GDP), adjusted for inflation, was forecast to grow 2.9 percent in 2018, down from the estimate of 3.0 percent expansion announced six months earlier, according to the Ministry of Strategy and Finance.

The ministry picked the U.S. protectionist moves as the main reason for the downward revision. Higher U.S. import tariffs would encourage other foreign governments to retaliate against U.S. companies, boosting trade conflict and reducing global trade.

The South Korean economy, which depends heavily on exports for growth, was expected to be hit hard by the trade conflict, especially in the second half of this year.

The ministry also selected higher crude oil price as a downside risk factor to the economy as it can restrict growth of export and private consumption in the second half.