A growing number of experts worldwide are expressing skepticism about the government’s rosy outlook for the country’s economic growth for 2019. The global credit rating agencies and investment banks have continued to cut their forecasts for Korea’s economic growth.
Fitch, Moody’s, Standard & Poor’s and Goldman Sachs lowered their forecasts for Korea’s growth to 2 percent to 2.1 percent. They implied that further downward revisions were possible, if the tension between Korea and Japan escalated. Morgan Stanley, which revised its growth outlook following the outbreak of the Korea-Japan trade dispute, sees the Korean economy growing 1.8 percent in 2019. ING Group and Nomura Securities also lowered their growth rate projections to 1.5 percent and 1.8 percent, respectively. The biggest risks for the Korean economy are global. The risks of a global slowdown are increasing with the U.S. approaching what looks like the end of a long expansion and it is likely that Korean economy will slow down further. On Friday, Japan’s cabinet on Friday approved a plan to remove South Korea from a so-called “white list” of countries that enjoy trade privileges with Tokyo. In response, South Korea’s finance minister said the country will take steps to drop Japan from its list of countries with fast-track export status. The Japan-Korea conflict threatens to disrupt the global supply chain for memory chips and other components vital for smartphones, laptops and servers.