Growth rate drops to 0% range

[Anchor]

The national research institute KDI has lowered this year's growth rate forecast to the 0% range.

Similar forecasts are being made by various institutions.

As policy responses have effectively come to a halt due to the presidential election, signs of stagnation are growing stronger.

Reporter Kim Ji-sook has the story.

[Report]

The Korea Development Institute, KDI, has drastically revised its growth rate forecast for this year.

Last May, it predicted 2.1%. In November, it forecasted 2.0%.
In February this year, it saw 1.6%, but now it has lowered it to 0.8%.

This is a half the figure from three months ago.

[Jeong Gyu-cheol/KDI Economic Outlook Division Head: "The increase in tariffs is becoming more pronounced, negatively affecting our exports, and that is also having some negative spillover effects on domestic demand."]

The term 'tariffs' has become prevalent as the overwhelming issues of declining exports and domestic demand are linked to tariffs.

Forecasts in the 0% range are emerging one after another.

JP Morgan and Bloomberg predict 0.7%, while the Hyundai Research Institute forecasts 0.8%.

The IMF's forecast of 1.0% now seems overly optimistic.

The Ministry of Economy and Finance and the Bank of Korea are projecting 1.8% and 1.5%, respectively, but significant downward revisions seem inevitable.

The Bank of Korea will announce its revised forecast on the 29th of this month.

Even if tariff negotiations go well, it won't solve everything.

The potential growth rate, which is the economic foundation, continues to decline without any rebound.

[Kwon Hyo-seong/Bloomberg Macroeconomic Analyst: "(For the potential growth rate) we need to consider how slowly it will decline, and policies that can improve productivity or maintain it at a high level are necessary."]

KDI has also called for the total mobilization of fiscal, monetary, and financial policies, but the seat of the president will remain vacant until the 3rd of next month.

This is KBS News, Kim Ji-sook.