South Korea on Monday trimmed its economic growth forecast for 2015 to 3.8 percent from 4.0 percent as it vowed to continue expansionary policies aimed at spurring domestic consumption.
The revised projection comes after the country’s central bank this month warned its own 3.9 percent growth forecast would be “difficult” to maintain as domestic demand alternated between positive and negative territories and a weak yen hurt the price competitiveness of South Korean firms against Japanese rivals abroad, AFP reported.
The finance ministry said that, in addition to the 2015 growth forecast being lowered, its estimate for this year’s economic growth was also revised down to 3.4 percent from 3.7 percent. South Korea’s economy grew 3.0 percent last year.
“We must maintain our expansionary macroeconomic and fiscal policies so that people can feel the effect of economic recovery,” President Park Geun-Hye said at a meeting of economic ministers on Monday.
Consumer spending has recovered at a slower-than-expected pace this year despite a government stimulus package and a series of cuts in the Bank of Korea’s key interest rate, which now stands at 2.0 percent.
The ministry said domestic demand may pick up next year, helped by lower oil prices.
Trade Dispute With US
South Korea on Monday took the United States to task before the World Trade Organization over Washington’s decision to slap anti-dumping tariffs on South Korean imports of steel pipes used by the oil industry.
The WTO said it had been notified by South Korea that it was requesting consultations on the US anti-dumping measures.
Seoul charged that the measures and US methodology for calculating prices and values were counter to a range of global trade rules, WTO said.
The move came in response to a US decision in July to impose duties of up to 16 percent on South Korean steel pipes and tubes used for oil drilling, Dow Jones Newswires reported.
Requesting consultations is the first step in trade disputes before the Geneva-based body, which polices respect for global trade accords in an effort to offer its 160 member economies a level playing field.
The consultations, which allow the parties to discuss the matter and reach a solution without proceeding to litigation, must begin within 30 days and generally cannot last longer than two months.
