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Korea Cuts Economic Growth Outlook, Raises Prices as Woes Mount

  • Economy seen expanding 2.6% this year, down from 3.1% before
  • Inflation likely to hit 4.7%, higher than Bank of Korea’s view

South Korea’s government downgraded its economic growth forecast for this year to less than the central bank’s outlook and raised its inflation estimate higher, underscoring mounting challenges for policy makers.

The Finance Ministry now sees gross domestic product advancing 2.6% and consumer prices rising 4.7% in 2022, a deterioration from 3.1% and 2.2% previously, according to a statement. That compares with the Bank of Korea’s forecasts last month of a 2.7% expansion and 4.5% inflation.