U.S.-China trade war causes S. Korea’s growth rate to be 0.4 percentage points lower …

U.S.-China trade war causes S. Korea’s growth rate to be 0.4 percentage points lower …

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We start over at the Bank of Korea… The BOK chief has for the first time put a
specific figure on the impact the U.S.-China trade war has had on the local economy… saying it is expected to have lowered growth
by up to point-4 percentage points. Our Hong Yoo has more. The U.S.-China trade dispute has cost South
Korea point-four percentage points of economic growth this year. Lee Ju-yeol, the Governor of the Bank of Korea,
said during a press conference in Washington on Friday local time, that half of the decrease
was caused by a drop in exports due to tariffs imposed between Washington and Beijing. He said the remaining half is due to a slowdown
in investment and consumption because of the economic uncertainties caused by the trade
spat. Lee explained that South Korea cannot avoid
the effects of the trade war as a large amount of its exports go to the U.S. and China. In the first 20 days of October alone, South
Korea saw a 19-point-5 percent decrease in exports on-year, with semiconductor exports
to China falling 20 percent on-year. The IMF also expects South Korea to suffer
most from the trade dispute. But the country’s economic growth rate is
expected to increase next year. Lee said there are predictions that the worst
has been avoided with the two economic superpowers reaching a phase one partial trade agreement,…
and he added that the semiconductor business will also begin to recover from the middle
of next year. Regarding interest rate cuts, Lee said that
they are being careful in deciding whether to implement an additional cut because the
interest rate is already low. He explained that it’s very important for
the central bank to have policy measures to counter a recession if it arrives. Regarding the inflation rate, the Bank of
Korea expects it to be at around zero percent for the next one or two months. The low inflation rate has become a headache
not just for the central bank but for the entire world to the point that it cannot be
controlled through monetary policy. Instead, a harmonious mix of fiscal and monetary
policy is needed for a macroeconomic stability. Hong Yoo, Arirang News.

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