Bank of Korea cuts growth outlook as scandal hits economy

SEOUL, South Korea – South Korea's central bank has lowered its forecast for the country's growth in 2017 due partly to the fallout from a massive influence-peddling scandal.

Bank of Korea said Friday that the economy will likely expand 2.5 percent this year, slower than its October prediction of 2.8 percent growth. It said Asia's fourth-largest economy will grow 2.8 percent in 2018.

The bank cited weak private consumption because of meager income growth, heavy household debts and the political uncertainties from the scandal.

Parliament impeached President Park Geun-hye in December and the Constitutional Court is considering whether she should be removed from power permanently for allegedly letting a long-time friend secretly meddle in state affairs.