(LEAD) S. Korea to revise down 2023 growth outlook from 1.6 pct: finance chief

All News 15:39 June 08, 2023

(ATTN: ADDS minister's current account forecast in paras 8-9)

SEOUL, June 8 (Yonhap) -- The South Korean government is likely to slightly lower its 2023 growth outlook from the current 1.6 percent, the finance minister said Thursday, amid weak exports and a slower economic recovery.

Finance Minister Choo Kyung-ho said the government plans to come up with a revised growth forecast at the end of June or early July.

"We earlier expected the economy to grow 1.6 percent this year, but I think we need to slightly revise it down in consideration of changing circumstances, latest data and various opinions from research institutions," Choo said in a forum organized by the Kwanhun Club, an association of senior South Korean journalists.

On Wednesday, the Organization for Economic Cooperation and Development lowered its 2023 growth outlook for South Korea to 1.5 percent from a 1.6 percent projection in March, citing dwindling exports and sluggish private investment.

Last month, the Bank of Korea also lowered its growth outlook for South Korea to 1.4 percent from a 1.6 percent expansion predicted three months earlier. The state-run Korea Development Institute slashed its growth outlook by 0.3 percentage point to 1.5 percent.

The revision came as the country saw an on-year fall in exports for an eighth consecutive month in May, as exports of semiconductors, the country's key export item, sank 36.2 percent amid a global economic slowdown.

The country has suffered a trade deficit since April last year on high energy prices, and it is the first time since 1997 that the country has logged a trade deficit for 15 months in a row.

But the minister said the country is expected to log a current account surplus after May and to record a trade surplus later this year.

In March, the country logged a current account surplus of US$270 million, swinging from a shortfall of $520 million a month earlier. The April figure is to be available on Friday.

Choo dismissed the possibility of any economic stimulus measures, stressing the need to curb inflation.

South Korea's inflation has been on an overall downward trend after reaching a peak of 6.3 percent in July last year.

But inflation nevertheless stayed above 2 percent -- the central bank's inflation target over the medium term -- for the 26th straight month in May, rising 3.3 percent on-year.