South Korea's central bank warned Wednesday that economic growth would be weaker than forecast after cutting its policy rate for the second time this year as a global downturn pummels exports and weighs on prices.
Wednesday's rate cut comes amid a wave of rate cutting by central banks around the world to shore up growth, and highlights the sense of urgency at the Bank of Korea to prop up a sputtering economy, especially with consumer prices falling. The decision to lower the main policy rate to 1.25 percent, matching a previous record low, was forecast by 21 of 25 analysts surveyed by Bloomberg.
The bank said growth this year wouldn't reach the 2.2 percent forecast it gave in July. When asked at a news conference if the economy would expand less than 2 percent this year, Gov. Lee Ju-yeol said he wanted to see data for the third quarter due next week before making a new projection.