Thursday, May 08, 2008

Bank of Korea's governor forecasts a stall in the country's economic growth

Lee Seongtae, Governor of the Bank of Korea, forecasted an economic slow down in the current fiscal year. Last year, the economic growth was at 5%. Earlier this year, it was said that the country will have a GDP of 4.7%. In a recent news conference, Lee Seongtae told the reporters that the economic growth would not surpass more than 4.5%, rather, it could go below the level of 4.5%. reports:

The bank earlier announced that it would keep its benchmark seven-day repurchase rate unchanged for a ninth straight month due to soaring import costs and looming signs of an economic slowdown. The outcome, at a monthly policy meeting, was widely expected.

The government has repeatedly expressed its hope for a lower interest rate to fuel domestic demand after plans for a 4.9 trillion won ($4.7 billion) supplementary budget were postponed.

But the central bank kept its key policy rate unchanged due to high inflation. Seven of 11 economists recently polled by Dow Jones Newswires had expected the central bank to hold steady; the other four had forecast a reduction of 25 basis points.

The economic slow down in USA, along with the rising cost of fuel,food, and raw materials have adversely affected the global economy. Like Korea, other big Asian economies -China, Japan, India are facing such economic slow down. To survive such conditions, the Asian countries should come together and take up various programs.

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