The Korea Development Institute (KDI), South Korea's top state-run think tank, cut its growth outlook for the Korean economy Tuesday to 2.6 percent. The KDI, which had predicted in December 2015 that the Korea economy would expand 3.0 percent in 2016, cut its growth outlook by 0.4 percentage points, citing a continued slump in exports and sluggish demand at home and abroad.
The KDI's latest forecast is in line with other major institutions like the OECD and the IMF, both of which expect Asia's fourth-largest economy to grow 2.7 percent. The Bank of Korea predicted 2.8 percent growth in its latest quarterly revision, while some private economic research institutions forecast growth will come in the mid 2 percent range. The Korea economy is thought to have already entered a low-growth phase.
The KDI said that as the Korean economy had grown 2.7 percent y-o-y in the first quarter, lower than the previous quarter’s 3.1 percent growth, the entire economy has been slowing down.
The KDI predicted 3.0 percent growth for Q2, 2.4 percent growth for Q3 and 2.2 percent growth for Q4.
