SEOUL, Dec. 22 (Xinhua) -- Outlook for South Korea's economic growth in 2017 is expected to be lowered by the Bank of Korea (BOK) on uncertainties at home and abroad, the central bank said on Thursday.
The BOK said in its activity report to the National Assembly that uncertainties about the Asia's No.4 economy's growth path got big in consideration of altered conditions at home and abroad.
The U.S. Federal Reserve's interest rate hike in December, the spreading protectionist moves and political uncertainty were cited by the BOK as downside risk factors to the economy.
The impeachment of President Park Geun-hye increased economic uncertainty in the absence of control tower, leading consumers to refrain from spending money. Facility investment also worsened.
After lifting the benchmark rate in December, the Fed indicated three rate hikes in 2017, boosting worries about possible foreign capital exodus from the South Korean financial market.
The BOK cut its policy rate from 3.25 percent in July 2014 to an all-time low of 1.25 percent in June this year. The bank froze the rate for six months through December.
The South Korean central bank raised a possibility for its 2017 growth outlook at 2.8 percent, unveiled two months earlier, to be lowered further. The bank is scheduled to announce its revised forecast next month.
Most of local think tanks already revised down growth forecasts, with the state-run Korea Development Institute (KDI) downgrading its outlook to 2.4 percent.
Outlooks for 2017 economic growth were set by the Korea Institute of Finance (KIF) at 2.5 percent and by LG Economic Research Institute (LGERI) at 2.2 percent.
