S.Korea's economy to meet potential growth rate in 2018: central bank governor

Source: Xinhua| 2017-12-21 11:05:57|Editor: Yurou
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SEOUL, Dec. 21 (Xinhua) -- South Korea's economy was forecast to meet its potential growth rate next year if there is no unexpected risk breaking out, the country's top central banker said Thursday.

Bank of Korea (BOK) Governor Lee Ju-yeol told a meeting with economic experts that South Korea's economy would continue to meet its growth potential next year based on global trade recovery, if there is no unexpected risk coming out.

The growth potential refers to the maximum economic growth which a country can reach without stoking inflation.

Despite unexpected events, Lee said, South Korea's economy was predicted to expand by over 3 percent this year, citing the impeachment of former President Park Geun-hye, geopolitical risks on the Korean Peninsula and stronger protectionist moves across the globe.

The BOK chief said the brisk growth was mainly attributable to local exporters, which helped log a high growth rate of export accounting for about half of the export-driven economy.

South Korea's export jumped 18.5 percent in the January-September period, compared with the same period of last year.

Lee said the country's headline inflation was forecast to be near 2 percent, the BOK's mid-term inflation target.

Meanwhile, the BOK head cited global protectionist moves in trade and normalized policy rates in major economies as potential risk factors facing the South Korean economy.

The BOK raised its benchmark interest rate by a quarter percentage point in late November to 1.5 percent from an all-time low of 1.25 percent, marking the first rate increase in almost six and a half years.

Despite the rate hike, the country's policy rate was identical to the upper end of the U.S. benchmark rate range of 1.25-1.50 percent. Pressure still runs high on the BOK to tighten its monetary policy further.