South Korea's Economy Faces Sluggish Growth Amid Policy Adjustments

The Bank of Korea has lowered its key interest rate for the second consecutive month amid concerns of a slowing economy and high inflation. The bank downgraded South Korea's economic growth projection due to weak consumption, sluggish exports, and rising global economic uncertainties.

The Bank of Korea has once again adjusted its primary policy rate, marking a second consecutive month of easing, as it faces a sluggish economic growth rate that has fallen short of initial expectations.

In its latest monetary policy meeting, the central bank has decided to cut its benchmark interest rate by 0.25 percentage points to 3%, revising economic growth forecasts downward to 2.2% for 2024 and 1.9% for 2025, amid fiscal challenges.

The cuts occurred despite persistent high inflation and substantial household debt, as South Korea navigates global unpredictability with fluctuating trade trends and potential impacts from the US's protectionist trade policies under Donald Trump's administration.

(With inputs from agencies.)