Lee Chang-yong "Rapid Decline in Consumer Sentiment Due to Martial Law Situation, Growth Rate Likely to Fall"

Lee Chang-yong, Governor of the Bank of Korea (right), is attending the full meeting of the Planning and Finance Committee held at the National Assembly on the 17th, responding to questions from lawmakers. Photo by Kim Hyun-min

Lee Chang-yong, Governor of the Bank of Korea, stated that this year’s economic growth rate for South Korea may be slightly downgraded from the previous forecast of 2.2% to 2.1%.

At a ‘Price Stability Target Operation Status Review Press Briefing’ held on the afternoon of the 18th at the Bank of Korea in Jung-gu, Seoul, Governor Lee said, "Consumer sentiment has significantly contracted, such as a decrease in card usage following the martial law situation," adding, "It is a very important time to stabilize consumer sentiment."

He further explained, "We previously expected the economic growth rate for the fourth quarter to be 0.5%, but under the current circumstances, it could fall slightly to 0.4% or lower," and "If that happens, this year’s economic growth rate for South Korea could also decline from the previous forecast of 2.2% to 2.1%."

Regarding next year’s economic growth rate, he maintained the previous estimate of 1.9% but mentioned the possibility of future changes. Governor Lee emphasized, "The budget bill passed by the National Assembly currently has about a -0.06 percentage point impact on next year’s economic growth rate," but added, "Since fiscal policy can change, we will discuss next year’s outlook again when new data is gathered."

He also said it is difficult to discuss the January base interest rate decision at this time. He responded, "The base interest rate will be decided after reviewing new data coming in January, including inflation, the economy, exchange rates, and household debt."