We start over at the Bank of Korea...<br />The BOK chief has for the first time put a specific figure on the impact the U.S.-China trade war has had on the local economy... saying it is expected to have lowered growth by up to point-4 percentage points.<br />Our Hong Yoo has more.<br />The U.S.-China trade dispute has cost South Korea point-four percentage points of economic growth this year.<br />Lee Ju-yeol, the Governor of the Bank of Korea, said during a press conference in Washington on Friday local time, that half of the decrease was caused by a drop in exports due to tariffs imposed between Washington and Beijing.<br />He said the remaining half is due to a slowdown in investment and consumption because of the economic uncertainties caused by the trade spat.<br />Lee explained that South Korea cannot avoid the effects of the trade war as a large amount of its exports go to the U.S. and China.<br />In the first 20 days of October alone, South Korea saw a 19-point-5 percent decrease in exports on-year, with semiconductor exports to China falling 20 percent on-year.<br />The IMF also expects South Korea to suffer most from the trade dispute.<br />But the country's economic growth rate is expected to increase next year.<br />Lee said there are predictions that the worst has been avoided with the two economic superpowers reaching a phase one partial trade agreement,... and he added that the semiconductor business will also begin to recover from the middle of next year.<br />Regarding interest rate cuts, Lee said that they are being careful in deciding whether to implement an additional cut because the interest rate is already low.<br />He explained that it's very important for the central bank to have policy measures to counter a recession if it arrives.<br />Regarding the inflation rate, the Bank of Korea expects it to be at around zero percent for the next one or two months.<br />The low inflation rate has become a headache not just for the central bank but for the entire world to the point that it cannot be controlled through monetary policy.<br />Instead, a harmonious mix of fiscal and monetary policy is needed for a macroeconomic stability.<br />Hong Yoo, Arirang News.<br />
