South Korea should retain its expansionary monetary policy stance as the economy is estimated to grow at a slower pace, the state run think tank Korea Development Institute said in a report on Thursday.
It forecast gross domestic product to expand 2.6 percent this year, down from the prior estimate of 3 percent. However, growth is forecast to pick up to 3.6 percent in 2014.
The government projects only 2.3 percent expansion for this year. The economic growth has plunged to a three-year low in 2012 with GDP growing by just 2 percent.
The central bank in May assessed that downside risks to growth remain considerable. After holding rates for six months, the bank decided to cut its rate by a quarter point to 2.50 percent.
The institute said it expects inflation to ease to 1.8 percent in 2013 from 2.2 percent in 2012.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.