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S. Korea may fall short of potential growth rate next year: finance minister

Finance 19:50 November 15, 2019

SEOUL, Nov. 15 (Yonhap) -- South Korea is likely to fall short of its potential growth rate next year, the country's finance minister said Friday.

The Bank of Korea has put the nation's potential growth rate at 2.5-2.6 percent next year.

"I think it may be difficult to reach the level of the potential growth rate," Finance Minister Hong Nam-ki told reporters after meeting with ambassadors from the Association of Southeast Asian Nations (ASEAN) in Busan, 450 kilometers south of Seoul.

On Wednesday, the state-run Korea Development Institute said Asia's fourth-biggest economy is expected to grow 2.3 percent in 2020, higher than this year's estimated 2 percent expansion.

The Organization for Economic Co-operation and Development and the International Monetary Fund have forecast South Korea to expand next year by 2.3 percent and 2.2 percent, respectively.

The Seoul government plans to release its 2020 growth outlook in mid-December.

In a press conference held on Monday, Hong said the government will execute policies to achieve a growth rate of over the 2.2-2.3 percent range.

Asked if Japan's restrictions on exports of key industrial materials to South Korea have affected the deteriorating gross domestic product forecasts, the minister said, "There seems to be an impact."

In July, Japan tightened regulations on exports to South Korea of three high-tech materials crucial for the production of semiconductors and displays. In August, Japan officially removed South Korea from its list of countries given preferential treatment in trade procedures.

Japan's moves are seen as retaliatory measures against a Seoul court ruling that ordered Japanese companies to compensate South Korean workers forced into labor during World War II.

In this photo taken on Nov. 15, 2019, Finance Minister Hong Nam-ki delivers a speech at a meeting with ambassadors from ASEAN countries at Lotte Hotel Busan in the port city of Busan, 450 km south of Seoul. (Yonhap)

kyongae.choi@yna.co.kr
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