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South Korea downgrades growth forecasts | South Korea downgrades growth forecasts |
(about 4 hours later) | |
Asia's fourth largest economy, South Korea, has cut its growth forecast, for this year and next, as consumer and business sentiment weakens. | |
The Ministry of Strategy and Finance said on Monday the economy would now grow by 3.4% this year, down from the 3.7% it forecast in July. | |
Growth in 2015 was also downgraded to 3.8% from 4% predicted earlier. | Growth in 2015 was also downgraded to 3.8% from 4% predicted earlier. |
The government said private investment and consumer spending were coming out weaker than it had expected. | The government said private investment and consumer spending were coming out weaker than it had expected. |
South Korea's economy expanded by 3% last year. | South Korea's economy expanded by 3% last year. |
The forecast downgrade shows the challenges facing the economy despite government measures such as the central bank cutting interest rates twice this year to boost growth. | The forecast downgrade shows the challenges facing the economy despite government measures such as the central bank cutting interest rates twice this year to boost growth. |
Government boost | Government boost |
The ministry said it does expect conditions to improve in 2015 on falling oil prices and more stimulus measures. | The ministry said it does expect conditions to improve in 2015 on falling oil prices and more stimulus measures. |
It forecasts domestic consumption to rise to 3% on an annual basis next year, which would be the highest since 2011. | It forecasts domestic consumption to rise to 3% on an annual basis next year, which would be the highest since 2011. |
The government is planning to introduce measures to boost wages and encourage businesses to create jobs and increase investment. | The government is planning to introduce measures to boost wages and encourage businesses to create jobs and increase investment. |
The moves include increasing the minimum wage and spending almost 60% of its annual budget in the first half of 2015. | The moves include increasing the minimum wage and spending almost 60% of its annual budget in the first half of 2015. |
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