OECD again lowers South Korea's growth forecast for this year from 1.5% to 1.0%

The Organization for Economic Cooperation and Development (OECD) has lowered its forecast for South Korea's economic growth rate this year from 1.5% to 1.0%, the first time in three months.
The OECD announced its economic outlook including these contents on the 3rd, according to the Ministry of Strategy and Finance.
The OECD's revised growth forecast for South Korea this year is roughly in line with other organizations' projections.
A Bloomberg survey conducted as of the 30th showed that the range of growth rate forecasts for South Korea this year from 41 domestic and international institutions was 0.3% to 2.2%, with an average of 0.985%.
In its revised economic outlook released on the 29th of last month, the Bank of Korea presented its forecast for this year at 0.8%, down 0.7 percentage points from February.
The downward revision of the OECD's growth forecast for South Korea is the second largest among G20 member countries after the United States (2.2% to 1.6%, -0.6 percentage points).
The declaration of martial law on December 3, 2019 dealt a shock to already weakening domestic demand, contributing to the decline in gross domestic product (GDP) in the first quarter."
He continued, "Impeaching the president would be effective in restoring consumer and business confidence, but it would also raise the uncertainty surrounding tariffs and international trade.
Regarding the reciprocal tariffs, he added, "Korea not only has a large direct trade with the United States, but also has a large indirect exposure through the global supply chain.
"The South Korean government is continuing negotiations, and we do not expect any retaliatory tariffs in the short term," he said. The OECD predicts that the unemployment rate will fall next year as employment expands due to increased economic activity among women and the elderly.
As a result, the growth rate for next year was maintained at 2.2%, the same as the forecast in March of this year. The OECD predicted that Korea's inflation rate for this year would be 2.1%, close to the target rate (2.0%).
Regarding South Korea's fiscal policy, the ministry said, "Fiscal support may be appropriate in the short term, but the creation of a sustainable long-term fiscal management framework is essential.
The OECD also recommended further easing of monetary policy in light of sluggish domestic demand, and predicted that the rate would fall to 2.0% by the end of the year.