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Fitch Solutions cuts Korea's 2020 growth outlook to 2.2 pct on virus

All News 15:07 February 19, 2020

SEOUL, Feb. 19 (Yonhap) -- Fitch Solutions Inc. downgraded its outlook for South Korea's 2020 economic growth to 2.2 percent from 2.5 percent Wednesday, citing the fallout of the novel coronavirus outbreak.

The latest forecast by the consultancy arm of global credit appraiser Fitch Group is lower than the Bank of Korea's prediction of 2.3 percent expansion for this year.

The outbreak of COVID-19 in China and around the world is likely to exert considerable downward pressure on Asia's fourth-largest economy, including exports, production and distribution, Fitch Solutions said.

Anticipating China's economic slowdown, the consultancy predicted South Korea's exports to grow 1.2 percent on-year in 2020, down from an earlier estimate of 1.5 percent.

China is South Korea's largest trading partner, with slightly over 25 percent of Seoul's overseas shipments heading to the world's second-largest economy after the United States.

Fitch Solutions cuts Korea's 2020 growth outlook to 2.2 pct on virus - 1

South Korea's economy grew 2 percent in 2019, the slowest expansion in a decade, hit by a trade war between the world's two largest economies. Its exports sank 10.3 percent on-year last year.

Fitch Solutions said South Korea's travel and tourism sector is expected to take a considerable hit from the new coronavirus as one-third of foreign visitors to Seoul come from China.

The consultancy revised down its growth projection for South Korea's private consumption to 2.2 percent from 2.4 percent, citing the negative impact of the COVID-19 spread.

Yet Fitch Solutions predicted the South Korean economy may get a slight boost from the government's stimulus measures, a recovery in the chip business and the full-fledged penetration of 5G technology.

South Korea confirmed 15 more cases of the novel coronavirus Wednesday, bringing the total number of infections in the country to 46.

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