Citigroup slightly lowers South Korea's GDP growth forecast for next year to 1.5%, expects the Central Bank of South Korea to cut interest rates next month.

On December 12th, Jinshi data reported that Citigroup released a report stating that considering the severity of the deterioration of South Korea’s economic sentiment this month is more serious than expected, it slightly lowered its GDP forecast for South Korea for the next two years by 0.1 percentage points to 2.1% and 1.5% respectively. The bank slightly lowered its GDPrise forecast for South Korea at the end of this year by 0.1 percentage points, to a quarterly increase of 0.3%, while raising its GDPrise forecast for the first quarter of next year by 0.1 percentage points, to a quarterly increase of 0.6%. Looking ahead to the first quarter of next year, the bank expects South Korea to adopt an expansionary policy combination, including the South Korea Central Bank’s interest rate cut to 2.75% in mid-January, and the government’s proposal of an additional budget of 30 trillion won (equivalent to about 1.1% of next year’s GDP). The bank expects the South Korea Central Bank to cut interest rates by 25BP in January, April, July, and October next year, and the target Intrerest Rate is expected to be 2%.