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JP Morgan Lowers S. Korea's Growth Outlook to 2.2%

Written: 2020-02-07 16:41:18Updated: 2020-02-08 15:28:28

JP Morgan Lowers S. Korea's Growth Outlook to 2.2%

Photo : YONHAP News

Concerns are rising that the spread of the novel coronavirus will deal a blow to the South Korean economy.

Global investment bank JP Morgan said Friday the outbreak's impact on the Korean economy will likely be larger than initially expected, and lowered its 2020 growth outlook for Korea from two-point-three to two-point-two percent.

The bank projected the country will see minus growth in gross domestic product in the first quarter of negative point-three percent, in consideration of the rapid spread of the new virus and increased factory closures in China.

It also noted that South Korea's manufacturing sector is closely linked with China's supply chain, and suspended production in China will adversely affect Korean exports and output.

In particular, JP Morgan mentioned the setbacks being suffered by Korea's auto-related sectors due to short supplies from China.

In light of these conditions, it predicted the Bank of Korea will slash its key rate this month.

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