MNI POLICY: BOK Lowers 2020 GDP Forecast to -0.2% From 2.1%

--Sees Recovery In 2021, With GDP Forecast Upped To +3.1% from +2.4%

     TOKYO (MNI) - The Bank of Korea has cut its 2020 GDP forecast to -0.2% from

the 2.1% seen in February, as weak exports and private consumption in the wake

of the coronavirus outbreak weigh on the outlook.

     It is the first time since the summer of 2009 that the BOK has forecast

negative growth for the country, when, it the fall out from the financial

crisis, it forecast GDP to decline by 1.6%.

     South Korea's GDP fell 1.4% q/q in Q1, reversing from a 1.3% gain in Q4.

South Korea's exports fell 2.0% q/q in Q1. The BOK also lowered its inflation

rate forecast this year to 0.3% from 1.0%.

     Looking for a snap back down the line, the BOK has increased its GDP

forecast for 2021 to +3.1% from +2.4%.

     --RATE CUTE

     Earlier in the day, the BOK cut its Base Rate by 25bps to a new all-time

low 0.50% in a bid to prevent the economy falling into recession as both exports

and consumer spending.

     In a statement published along side the decision, the BOK said it will

"continue to conduct monetary policy in order to support the economy and

stabilize consumer price inflation at the target level over a medium- term

horizon, while paying attention to financial stability."

     The BOK last cut rates on March 16, when it trimmed the policy rate by

50bps in the wake of an inter-meeting cut by the U.S. Federal Reserve.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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