Downside risks to South Korean economy are bigger than expected
The finance minister of South Korea has recently told that downside risks to the country’s economy appeared to be bigger than expected because domestic consumption keep limping amid actual risks.
South Korean economy has been demonstrating apparent signs of recovery since mid-February, because exports, production and sentiment drastically improved.
Nevertheless, South Korea still has must to do as for its national economy. Domestic consumption and in particular capital investment keeps slowing while sluggishness seems to be dominating in China. All of this might result in more serious risks than previously expected.
Apart from that, the finance minister stressed that the recent GDP forecast has been downgraded by the IMF as well as the Bank of Korea, thus giving more emphasis to South Korean downside risks.
By the way, the Bank of Korea has officially decreased its GDP forecast for 2016 from 3% to 2.8%, while the IMF dared to downgrade its projection from 2.9% to 2.7% last week.
The minister told there was no choice except bolstering the strength of the national economy by persistently asking for structural reforms.