SEOUL: South Korea's central bank saw a higher possibility for the modest slowdown of the global economy though some worried about a sharp slump, the Bank of Korea (BOK) report said Thursday.
The BOK said in its monetary policy report to the National Assembly that forecasts for the moderate slowdown of the global economy were supported by a majority, though some supported outlooks of a sharp slump.
The report noted that though the growth rates of major economies, including the United States, may get lower, the rates were not expected to fall sharply given the improved employment and household income.
South Korea's real gross domestic product (GDP), adjusted for inflation, slipped 0.3 percent in the first quarter from the previous quarter due mainly to weak export, caused by the downturn in business cycle of the global chip sector and global economic slowdown.
The real GDP was widely forecast to rebound in the second quarter given the expected fiscal expenditure that was delayed for temporary reasons.
The BOK revised down its 2019 growth forecast for the South Korean economy to 2.5 percent last month from 2.6 percent three months earlier, lowering its outlook for headline inflation from 1.4 percent to 1.1 percent.
The BOK report said the central bank will alter its target rate depending on whether economic growth and headline inflation would be in line with expectations, while considering uncertainties at home and abroad.
The BOK left its benchmark interest rate unchanged at 1.75 percent during last month's rate-setting meeting. It saw the current policy rate remain at an accommodative level.
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