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Bank of Korea cuts economic growth forecast as ferry disaster dented consumption

South Korea's central bank says economic growth will be slower than expected this year because consumer spending has waned following a deadly ferry sinking.

Lee Ju-yeol, governor at the Bank of Korea, said Thursday that South Korea's economy will expand 3.8 percent this year instead of 4.0 percent predicted in April.

The governor said the revision was due to a decline in consumer spending after the April 16 ferry disaster that profoundly shocked South Koreans. The tragedy killed 293 people and left 11 missing. Most of the dead were teenagers on a school trip.

Sales of clothes, food and fuel dropped in April. Tourism, restaurant and leisure industries took most of the brunt of the tragedy because schools canceled trips and South Koreans refrained from drinking and other festive activities.