(Bloomberg) -- South Korea said its economic growth faces prolonged downside risks as uncertainty surrounding external conditions grow more than expected.
Yoon Jong-won, the presidential secretary for economic affairs, said on Friday the downward period is becoming more prolonged, reversing comments he made in May that growth was expected to improve “significantly” in the second quarter. Yoon said the uncertainties worsened more than he had thought in the first quarter amid trade tensions and bigger declines in computer chip prices.
The gloomy outlook comes as the Asia's fourth-largest economy, a bellwether for global trade and technology, posted a current-account deficit in April for the first time since 2012 and reported 0.4% decline in gross domestic product in the first quarter.
Yoon said the economy is moving over from the low point and is showing a slight recovery. The current-account balance will be back in the black in May, he said, adding that the possibility of sharp drop in prices is not high as core inflation maintains the 1% level.
--With assistance from Jungah Lee.
To contact the reporter on this story: Sohee Kim in Seoul at skim847@bloomberg.net
To contact the editors responsible for this story: Andrew Davis at abdavis@bloomberg.net, John McCluskey
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