SEOUL, South Korea (AP) — South Korea's central bank has trimmed its outlook on Asia's fourth-largest economy, citing the instability in Chinese markets.
The Bank of Korea said the country's economy will expand 3.0 percent this year, slower than its 3.2 percent growth prediction in October.
Governor Lee Ju-yeol said the volatility in Chinese financial markets and a sharp drop in the South Korean currency were behind the revision.
The central bank said a recovery in consumer spending could be limited by the phase-out in consumption tax cuts and slowing sales of housing markets.
Private capital spending will likely see slower growth due to uncertainties at home and abroad, it added.
The bank's outlook is more optimistic than private economic research centers but is broadly in line with the financial ministry's forecast.