Asia

South Korea's central bank cuts growth forecast

Associated Press
Published | Updated

Women stand by a sale sign at a shopping district in Seoul, South Korea, Tuesday, April 19, 2016. South Korea's central bank lowered its growth forecast for Asia's fourth-largest economy on Tuesday, citing the country's weak first-quarter economic performance and a downgrade in the global economic outlook. But it kept its policy rate steady for this month.(AP Photo/Ahn Young-joon) (The Associated Press)

A man sits in front of a cosmetics shop at a shopping district in Seoul, South Korea, Tuesday, April 19, 2016. South Korea's central bank lowered its growth forecast for Asia's fourth-largest economy on Tuesday, citing the country's weak first-quarter economic performance and a downgrade in the global economic outlook. But it kept its policy rate steady for this month.(AP Photo/Ahn Young-joon) (The Associated Press)

People pass by the headquarters of Bank of Korea in Seoul, South Korea, Tuesday, April 19, 2016. South Korea's central bank lowered its growth forecast for Asia's fourth-largest economy on Tuesday, citing the country's weak first-quarter economic performance and a downgrade in the global economic outlook. But it kept its policy rate steady for this month.(AP Photo/Ahn Young-joon) (The Associated Press)

South Korea's central bank has lowered its growth forecast for Asia's fourth-largest economy.

The Bank of Korea said Tuesday that South Korea's economy will likely expand 2.8 percent this year over a year earlier, down from the 3.0 percent expansion predicted in January.

Governor Lee Ju-yeol blamed the economy's weaker-than-expected first quarter performance and the downward revision in the global economic outlook by global agencies.

South Korea's exports are suffering as demand from China, its top trading partner, softens. Lee said that despite uncertainties in the global outlook, South Korea will see a modest recovery during the rest of the year.

The bank kept its monthly policy rate at a record low of 1.5 percent. It lowered the base rate twice last year.