Forecast of 1.8% Low Growth this Year...Possible to Additional Supplementary Provisions if Needed

Bank of Korea predicts 1.9% and IMF/KDI 2.0%..."Impeachment does not reflect"

Government executes 67% of finances in the first half of the year...supporting the people's livelihoodTotal mobilization of available public sector resources worth KRW 18 trillion

Reviewing additional economic reinforcement if necessary...the possibility of setting up an extra budget

[Anchor]
The government predicted that our economic growth rate will be lowered to 1.8% this year.

The government has decided to consider additional economic reinforcement measures if necessary due to higher internal and external uncertainties than ever, which is interpreted as leaving open the possibility of creating an extra budget.

There is also growing concern that the prolonged impeachment process will further reduce the growth rate.

Reporter Oh In-seok on the report.

[Reporter]
Last month, the consumer sentiment index fell by the biggest margin since the COVID-19 pandemic, and the domestic economy has taken a direct hit.

The downside risks of the economy are increasing.

The government has announced its economic policy direction this year.

This year, the Korean economy is expected to grow only 1.8% as internal and external uncertainties expand more than ever, economic difficulties continue.

[Choi Sang-mok / Acting President and Deputy Prime Minister for Economic Affairs: The growth rate is down to 1.8%, adding to the difficulties of people's livelihoods, and the impact of external credibility. We have established economic policy directions for 2025 with the goal of managing our economy as stable as possible.

In particular, exports will fall sharply to 1.5% this year from 8.2% last year, while construction investment will still remain negative, the government predicted.

It is expected that the number of employed will only increase by 120,000 and private consumption will improve slightly to 1.8%.

Earlier, the Bank of Korea presented a 1.9% forecast for Korea's economic growth this year and the IMF and KDI 2.0%, respectively, but emergency martial law and impeachment variables were not considered.

In the first half of the year, the government decided to boost the economy of people's livelihoods by increasing fiscal execution to a record high of 67%.

In addition, the government plans to strengthen the economy by mobilizing all available resources in the public sector worth 18 trillion won from the beginning of the year.

If necessary, the government will also consider additional economic reinforcement measures to accelerate economic recovery, which is interpreted as leaving open the possibility of an extra budget.

[Kim Beom-seok / First Vice Minister of Strategy and Finance: We will review the overall economic conditions in the first quarter and review additional measures to strengthen the economy if necessary, taking into account the pattern of the new U.S. government's policy, the flow of economic indicators, and the economic situation of people's livelihoods.]

Experts worry that growth will fall further if the impeachment process drags on this year's economic outlook and the second Trump administration pushes for trade policies such as universal tariffs.

[Seok Byung-hoon / Professor of Economics at Ewha Womans University] As political uncertainty is intensifying, the slump in domestic demand is expected to accelerate, and the response to changes in trade policy following the launch of the second Trump administration is expected to be delayed. It's likely to make the recession worse. We believe that growth may fall to the mid-1% range.

Considering the political turmoil and Trump risks, some even predict that growth could fall to the early 1% range this year.

This is YTN Oh In-seok.

Reporter for shooting
: Jeong Chul-woo
Video editing: Lee Eun-kyung
Design: Jung Eun-ok