Government confirms 1% range growth rate for next year citing uncertainties

[Anchor]

The grim economic outlook is being confirmed by figures.

As domestic and international institutions have already lowered their growth rate forecasts, our government has also acknowledged a growth rate in the 1% range for next year.

First, we have a report from Kim Jin-hwa.

[Report]

Deputy Prime Minister for Economic Affairs Choi Sang-mok held the first press conference since the emergency martial law situation.

He hinted at a downward adjustment of next year's economic growth rate.

[Choi Sang-mok/Deputy Prime Minister for Economic Affairs: "It is inevitable that next year's growth outlook will be downward, and I believe it is highly likely to fall slightly below the potential growth rate."]

Our country's potential growth rate is 2%, which means acknowledging a growth rate in the 1% range, revealing a sense of crisis.

Previously, the government had anticipated a 2.2% growth for next year.

Even before the martial law situation, domestic and international institutions were already lowering their forecasts for our economic growth rate.

This was due to factors such as a slowdown in export growth and the expected strengthening of protectionism after the inauguration of Trump’s second term. But after the martial law crisis, there is now the additional adverse factor of weakened consumer sentiment.

Deputy Prime Minister Choi pointed out that "the expanding trend of uncertainty is concerning" rather than just the growth rate figures.

There are noteworthy points in the report released by the Bank of Korea last month.

The Bank of Korea lowered next year's growth rate to 1.9%, assuming that the universal tariff of 10-20% that the U.S. announced it would impose on all imports would be implemented in the first quarter of 2026.

Since the president-elect Trump has promised to legislate tariff policies within 100 days of taking office in January, the implementation date could be accelerated, making the 1.9% growth rate forecast an optimistic scenario.

The impact of the martial law and impeachment situations is also not reflected.

[Joo Won/Director of Economic Research at Hyundai Economic Research Institute: "Political uncertainty is difficult for us to predict, so if this (impeachment situation) drags on and negatively affects consumption or investment, the growth rate could go down."]

The passage of the budget cuts has also reduced the government's capacity to respond to the economy, which has been cited as a basis for the downward adjustment to the growth rate.

This is KBS News, Kim Jin-hwa.