The Myeongdong shopping district in Seoul is busy with locals and tourists in this file photo taken on Jan. 2, 2025. (Image courtesy of Yonhap)
SEOUL, Jan. 20 (Korea Bizwire) — The Bank of Korea (BOK) said Monday its outlook for South Korea’s economic growth this year may be lowered to as low as 1.6 percent due to a political crisis sparked by suspended President Yoon Suk Yeol and weak domestic demand.
The BOK had presented 1.9 percent growth outlook for 2025 in November. The central bank said it has judged that its forecast may need to be “adjusted to 1.6-1.7 percent as of January.”
“Political uncertainties sparked by the martial law imposition in December and the subsequent impact on the economic sentiment are presumed to cause this year’s growth outlook to be slashed by around 0.2 percentage point,” the BOK said in a report.
The central bank is scheduled to officially announce its revised outlook in February.
“The February figure will depend on the timing of political uncertainties being eased, the government’s supportive measures and economic policies of the new U.S. administration,” the report read.
The finance ministry earlier forecast the economy to grow 1.8 percent in 2025, pointing to heightened uncertainties at home and abroad.
South Korea’s potential growth rate is at 2 percent, and this year may mark the first time ever that the country’s yearly growth rate falls below the 2 percent level.
In December, the National Assembly voted to impeach Yoon pending a final court ruling for his shocking, albeit short-lived, martial law imposition.
Yoon was formally arrested Saturday as an extensive probe has been under way into the incident.
(Yonhap)
