Bank of Korea board notes declining economic momentum

The Bank of Korea's board is concerned about the country's economic slowdown. Minutes from a recent meeting reveal that board members believe the economy is losing momentum quicker than anticipated. Factors contributing to this include weak domestic spending and uncertainties surrounding U.S. tariff policies. On February 25, the Bank of Korea lowered interest rates by 25 basis points to 2.75 percent. They also reduced their GDP growth forecasts significantly. The board is shifting from a restrictive monetary policy to a more neutral one to encourage growth. One board member noted that the domestic economy is slowing more than expected, while another pointed out that consumer sentiment is suffering due to both local and international uncertainties. Exports are also growing at a slower pace, leading to a decrease in overall economic growth. In the fourth quarter of last year, South Korea's economy grew just 0.1 percent. The Bank of Korea now forecasts economic growth of 1.5 percent for this year, down from an earlier estimate of 1.9 percent.