Anchor: The government slashed the nation’s economic growth outlook for 2025 by a zero-point-four percentage point to one-point-eight percent, citing concerns of sluggish exports and a possible shift in U.S. trade policy under the incoming Donald Trump administration. This is according to the "2025 Economic Policy Direction" released on Thursday by the Ministry of Strategy and Finance.
Max Lee has more. 

Report: The finance ministry has predicted a year-on-year economic growth rate of one-point-eight percent this year, representing a zero-point-four percentage point downgrade from its forecast from July.

The ministry attributed the downward revision to an expected slowdown in export growth due to heightened competition in key industries like semiconductors and a possible shift in U.S. trade policy under the incoming Donald Trump administration.

The ministry also said the domestic outlook is less than promising.

While inflation and interest rates are expected to decline gradually, leading to modest improvements in consumption and facility investment, investment in construction is expected to remain lackluster for the time being.

The continued domestic political uncertainty and the National Assembly’s decision to slash this year’s budget were also highlighted as negative factors.

But Kim Beom-seok, first vice minister of economy and finance, said the current political turmoil had limited impact on the 2025 outlook.

If the government’s forecast proves accurate and the economy grows by just one-point-eight percent this year, it will fall short of the potential growth rate of two percent.
 
Meanwhile, inflation is expected to cool to one-point-eight percent this year, as compared with two-point-three percent in 2024, based on the assumption that global oil prices will stabilize.

Also, due to the declining working-age population and weak economic conditions, the nation’s workforce is forecast to increase by only 120 thousand people, as compared with 170 thousand people last year.

While the data has yet to come out for the fourth quarter of 2024, a growth rate of two-point-one percent is expected for the year as a whole.
Max Lee, KBS World Radio News.