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SEOUL–The Bank of Korea trimmed its gross domestic product forecast for this year while maintaining its earlier inflation outlook, as economic growth has been patchy.
The central bank now expects the country’s economy to expand 2.9% in 2018, a marginally slower pace than its April estimate of 3.0%, BOK Gov. Lee Ju-yeol said at a news conference Thursday.
The bank expects consumer prices will rise 1.6% this year, unchanged from its earlier projection, Mr. Lee said.
Earlier Thursday, the central bank held its policy rate unchanged at 1.50%, though a tighter policy could be on the horizon following its first rate increase in more than six years in November.
The bank is expected to wait for more evidence of economic improvement before it pares its support for growth.
Exports-which account for half of South Korea’s economy–retreated in June after a brief rebound the prior month. There are growing worries over South Korea’s trade-dependent economy due to deepening U.S.-China trade friction.
Inflation remains subdued due to soft private consumption. The headline consumer price index in June rose a softer-than-expected 1.5%–well below the bank’s annual inflation target of 2%.
The South Korean economy expanded 3.1% last year. Inflation averaged 1.9% for the full of 2017.