IMF warning..."Korea's Bigger Impact in U.S.-China Trade War After U.S. Presidential Election"

[Anchor]
The International Monetary Fund and IMF predicted that South Korea will be hit harder than other countries if the U.S.-China trade conflict intensifies after the U.S. presidential election.

As for Korea's economic outlook, the domestic market will improve from now, but the growth rate will fall further next year.

I'm correspondent Kwon Jun-ki from Washington.

[Reporter]
While the U.S.-China trade conflict is expected to intensify after the U.S. presidential election, the IMF press conference raised questions about the impact on the Korean economy.

The IMF predicted that it would be relatively more negatively affected, pointing to the characteristics of the Korean economy that relies on exports.

[Thomas Hebling / Deputy Asia-Pacific Director, IMF: Rising U.S.-China trade conflict is a major downside risk to South Korea. South Korea is closely tied to global supply chains and global markets and is strongly exposed to both the U.S. and China.

However, he did not provide a more detailed outlook, saying that there will be many variables depending on the details, such as what the U.S. and China will take when the trade war burns.

Regarding the overall Korean economy, he reaffirmed his previous forecast that it would fall from 2.5% this year to 2.2% next year, evaluating that domestic demand is a problem rather than exports.

However, the situation is expected to improve as inflation is caught and the Bank of Korea begins to ease monetary policy.

[Thomas Hebling / Deputy Asia-Pacific Director, IMF: We expect (South Korea's) real purchasing power to increase and domestic demand to strengthen. In fact, domestic demand strengthened as expected in the third quarter.]

In a separate press conference, IMF Governor Georgieva said, "The path ahead of China is two ways: export-led growth and boosting domestic demand," and diagnosed that the path China will pursue is domestic demand.

[Crystalina Georgieva / IMF Governor: We see domestic demand as a more reliable growth engine as China's economy has grown significantly]

He also urged decisive action, saying that failure to address the property slump would hurt Chinese consumer confidence.

The IMF governor also warned that the potential growth rate could slow below 4% if the Chinese government does not take care of the economic crisis.

This is YTN Kwon Jun-ki from Washington.