IMF lowers S. Korea's growth forecast amid export and demand concerns

[Anchor]

The International Monetary Fund, IMF, has lowered its growth rate forecasts for South Korea for this year and next year.

This was attributed to sluggish domestic demand this year and external uncertainties next year.

There are particular concerns that export momentum may decline.

Reporter Kim Jin-hwa has the story.

[Report]

Samsung Electronics reported third-quarter results below market expectations in the semiconductor sector.

After the U.S. presidential election, its stock price fell to the 40,000 won range for the first time in four years and five months.

[Joo Won/Director of Hyundai Research Institute: "(The main) export item is memory semiconductors, and it seems that the memory semiconductor cycle is now heading downward."]

The domestic semiconductor production, which had been on an upward trend, recorded a decline for the first time in 14 months, indicating that the industry outlook is becoming uncertain.

With semiconductors, which account for 22% of total exports, stalling, the export growth rate, which had been above 10%, slowed to 4.6% last month.

The IMF, which assessed the overall Korean economy over the past two weeks, also focused on this aspect.

It stated that exports have primarily driven Korean growth and lowered next year's growth rate from previous forecasts.

[Rahul Anand/Head of IMF Korea Mission: "However, uncertainties around the outlook remain high and the risks are tilted to the downside."]

It also suggested that breakthroughs should be sought in exports.

[Rahul Anand/Head of IMF Korea Mission: "The other policy measure could be to look at diversifying exports not only in terms of destinations that's important but also diversification from manufacturing to services."]

The IMF has also revised this year's growth rate down by 0.3 percentage points due to sluggish domestic demand.

This highlights the 'double whammy' facing our economy, where the strength of exports that had been boosting the economy is weakening amid prolonged domestic recession.

The IMF mentioned that rapid aging and technological changes such as the emergence of artificial intelligence are environmental changes that Korea faces, emphasizing the need for strong economic policies above all.

This is KBS News, Kim Jin-hwa.