Gov't lowers 2015 growth forecast to 3.8%

The South Korean government Monday lowered its 2015 growth forecast for the country's economy to 3.8 percent from an earlier estimate of 4.0 percent, citing sluggish domestic consumption and economic uncertainties at home and abroad.

The figure is higher by 0.4 percentage point than the government's growth forecast for this year.

It is also higher than growth rates for 2015 set by the state-run Korea Development Institute (KDI) and private institutions. The KDI predicted 3.5 percent; the Hyundai Research Institute 3.6 percent; the Korea Institute of Finance 3.7 percent and the LG Economic Research Institute 3.4-3.8 percent.

The Bank of Korea (BOK) projects the economy would grow 3.9 percent in 2015.

Projections by foreign institutions are lower than those forecasts. BNP Paribas and UBS predicted 3 percent each; and HSBC 3.1 percent.

The government suggested the lower-than-expected growth rate in light of the weakening consumer sentiment and economic uncertainties, such as the possibility of the United States raising its base rate, weakening yen, and slowing Chinese and eurozone growth, officials said.

Internal uncertainties include growing household debts and falling competitiveness of the manufacturing industry, they said.

Park Sae-jin swatchsjp@ajunews.com

Gov't lowers 2015 growth forecast to 3.8%

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