SEOUL, South Korea – South Korea has lowered its growth forecast for next weak citing the persistently weak sentiment among consumers and businesses.
The finance ministry said Monday that Asia's fourth-largest economy will expand 3.8 percent in 2015. Six months ago, it forecast 4.0 percent growth.
The downward revision, representing some improvement from 3.4 percent growth this year, shows the government's challenge in encouraging consumers to spend more and businesses to boost investment despite its expansionary policies and the central bank's two rate cuts this year.
Director-General Lee Chanwoo said the recovery in consumer spending and capital expenditure remains weaker than expected in the last two months.
Lee said consumers and businesses still have great uncertainties about next year and the last quarter's improvement in the economy stemmed mostly from the government policies.