KDI cuts 2024 economic growth outlook for S. Korea to 2.5 pct

A major South Korean state-run think tank on Thursday revised down its economic growth outlook for the country this year to 2.5 percent as weak domestic demand is forecast to constrain an export-led recovery. The latest projection by the Korea Development Institute (KDI) marked a 0.1 percentage point fall from its earlier forecast presented in May. It is on a par with the forecasts by the International Monetary Fund and the Bank of Korea. The South Korean government and the Organization for Economic Cooperation and Development presented a 2.6 percent expansion. "Exports are expected to expand at a faster clip than previously anticipated, but the recovery in private consumption and facility investment has been delayed," the KDI said in a report. The institute jacked up the exports growth forecast this year from 5.6 percent to 7 percent. But it slashed the forecast for private consumption expansion to 1.5 percent from the previous 1.8 percent. "Facility investment is expected to increase by 0.4 percent, significantly lower than the previous forecast of 2.2 percent, as the upturn in the semiconductor sector is unlikely to lead to investment," the KDI said. Consumer prices, a key gauge of inflation, are forecast to climb 2.4 percent in 2024, with the latest forecast marking a 0.2 percentage point decrease from its earlier outlook. "The adjustment was based on sluggish domestic demand and falling global oil prices," the KDI said. The think tank maintained its growth forecast for South Korea next year at 2.1 percent. Source : Yonhap News Agency