The 3.4 percent GDP growth forecast is lower than growth rates for this year set by the government and the state-run Korea Development Institute (KDI). The government predicted 3.8 percent, 0.2 percentage point lower than its earlier estimate, and the KDI 3.5 percent, 0.3 percentage point lower than its earlier projection.
"The central bank's outlook for this year is lower than its October forecast and those by other institutions as well, mainly because of lower-than-expected growth forecast for the fourth quarter," Governor Lee Ju-yeol of the Bank of Korea (BOK) said in a news conference, following a meeting of the BOK's Monetary Policy Committee. During the meeting, the central bank froze the base rate at 2 percent for three consecutive months.
The BOK projects the economy would grow 0.4 percent on-quarter in the October-December period, 0.6 percentage point lower than its earlier outlook.
The central bank also cut its inflation forecast for 2015 to 1.9 percent from 2.4 percent.
reporter
Park Sae-jin
swatchsjp@ajunews.com
