SEOUL : Most of the Bank of Korea’s board members assessed Asia’s fourth largest economy was losing steam faster than expected due to sluggish domestic spending and uncertainties from U.S. tariff policies, minutes from its previous meeting showed on Tuesday.
The BOK cut interest rates by 25 basis points to 2.75 per cent and significantly lowered its GDP forecasts on February 25, taking the economy from a restrictive monetary policy stance towards a neutral one to support growth.
“Domestic economy is getting more sluggish than we had expected earlier and downside risks is growing from U.S. tariff policies,” one of the seven board members who voted to cut rates in February, said, according to the minutes.
Another one who also voted to cut rates said “consumption is slowing due to deteriorating sentiment from uncertainties at home and abroad, while exports growth is slowing, resulting in overall easing of economic growth.”
South Korea’s economy grew a meagre 0.1 per cent in the fourth quarter of last year. The BOK now expects economic growth of 1.5 per cent for this year, below an earlier 1.9 per cent forecast.
