Story perspectives

South Korea Slashes 2025 Growth Forecast Amid Trade Woes

8/23/2025

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Summary

Story summary

South Korea's government has lowered its 2025 economic growth forecast to 0.9%, the lowest since the Covid-19 pandemic.
Weaker exports and global trade uncertainties are the primary reasons for this adjustment.
Domestic consumption is improving, supported by government vouchers, but high inflation and household debt persist.
The Bank of Korea may increase its GDP forecast, expecting stronger consumption in Q3.
Ongoing structural issues, such as a declining workforce and investment challenges, limit growth potential.

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Story summary

South Korea's government has lowered its 2025 economic growth forecast to 0.9%, the lowest since the Covid-19 pandemic.
Weaker exports and global trade uncertainties are the primary reasons for this adjustment.
Domestic consumption is improving, supported by government vouchers, but high inflation and household debt persist.
The Bank of Korea may increase its GDP forecast, expecting stronger consumption in Q3.
Ongoing structural issues, such as a declining workforce and investment challenges, limit growth potential.