Anchor: The Bank of Korea forecast the economy to contract by one-point-three percent this year with the country gripped by a new wave of COVID-19.
Meanwhile, South Korea's central bank decided to keep the benchmark interest rate unchanged at zero-point-five percent.
Park Jong-hong has the report.

Report: The Bank of Korea(BOK) on Thursday revised down its growth estimate from minus point-two percent as projected in May to minus one-point-three percent.

BOK governor Lee Ju-yeol said this downgrade was inevitable given the ongoing sluggishness of the domestic economy.

[Sound bite: Bank of Korea Governor Lee Ju-yeol (Korean/English translation)] 
(Reporter: “What was the main reason for the adjustment and how much has the resurgence of COVID-19 been reflected?”)
“We noted the ongoing spread of the COVID-19 pandemic and the slower-than-expected recovery of the country’s exports and domestic spending. Other factors were the lower-than-expected second quarter exports and the prolonged rainy season coupled with the torrential rains.” 

Earlier this year, the BOK had projected growth of two-point-one percent but later slashed the estimate to minus point-two percent in May before this latest decrease.
 
The South Korean economy has seen negative growth only twice before: minus one-point-six percent in 1980 and minus five-point-one percent during the Asian financial crisis in 1998.

[Sound bite: Bank of Korea Governor Lee Ju-yeol (Korean/English translation)] 
(Reporter: “What would the impact be like if social distancing guidelines are raised to the highest Level Three and how would that affect stocks, exchange rates and financial markets?)
“Even if the [social distancing] guidelines are raised [to Level Three], the ripples would vary depending on the specific guidelines and duration. Of course a tougher guideline would work to limit the pace of real economic recovery and this could affect stocks and exchange rates. Mindful of the volatility in the financial markets, we will oversee the situation and try to stabilize the markets.” 

The BOK forecasts that the growth rate could fall further to minus two-point-two if the current outbreak continues until this winter.

Meanwhile, as widely expected, the BOK's monetary policy board kept steady the benchmark seven-day repo rate at zero-point-five percent for the second straight time.

The BOK cut the policy rate to the record low in May after delivering an emergency rate cut of half a percentage point to point-75 percent in March to cushion the impact of the then-newly emerging coronavirus outbreak.

The central bank had decided to keep the rate at the current level in July as well.
Park Jong-hong, KBS World Radio News.