South Korea Cuts Slightly 2008 GDP Forecast

South Korea's central bank cut its economic growth forecast for the second half of the year by a half percentage point on Tuesday, while shaving its full-year growth forecast by a smaller margin.

Korea, Korean Flag
Korea, Korean Flag

South Korea's gross domestic product is now expected to grow 3.9 percent in the July-December period over a year ago, slower than the central bank's earlier forecast for a 4.4 percent rise, the Bank of Korea said in a statement.

The annual growth in Asia's fourth-largest economy was estimated at 5.4 percent for the first half, topping a 4.9 percent rise forecast in December 2007, which would allow growth for the full year to reach 4.6 percent, the central bank said.

It had predicted growth in all of 2008 would slow to 4.7 percent from 5.0 percent in 2007.

It raised its current account deficit forecast to $9.0 billion for all of 2008 from a $3.0 billion deficit forecast earlier, while raising the consumer inflation forecast for the year to 4.8 percent from its earlier forecast of 3.3 percent.

The central bank's first official revision to its economic growth forecasts comes before its policy meeting on July 10 to decide whether to change the policy interest rate, which was held steady for 10 consecutive months.