Moody's Downgrades South Korea's Growth Forecast from 2.7% to 2.5%

[Asia Economy Reporter Jin-ho Kim] The international credit rating agency Moody's downgraded South Korea's economic growth forecast for this year to 2.5% based on real Gross Domestic Product (GDP) on the 26th. This is 0.2 percentage points lower than the 2.7% forecast presented in March.

In the global macro outlook report published on the same day, Moody's explained the revision by stating, "South Korea's trade balance deteriorated significantly in April due to a sharp increase in imports caused by rising prices of raw materials such as energy and a slowdown in exports due to a steep decline in exports to China."

It also added, "South Korea's industrial production maintained resilience due to strong demand for exports in the semiconductor, steel, and electronics sectors," but warned that "downside risks are increasing due to headwinds from China and decreased demand from Europe."

However, Moody's raised South Korea's growth forecast for next year by 0.2 percentage points from 2.6% presented in March to 2.8%.