South Korea should normalize monetary policy, IMF says
SEOUL, Nov 20 (Reuters) -South Korea should continue to normalize monetary policy to provide support for shoring up economic activity even as headline inflation is easing, the International Monetary Fund said on Wednesday.
"While inflation is around the Bank of Korea's target of 2%, a gradual monetary policy normalization seems appropriate given high uncertainty," the IMF said in a statement, concluding its annual visit to the country.
It downgraded South Korea's 2024 growth forecast to 2.2% from 2.5% partially due to "a weak recovery of domestic demand," and also cut the forecast for next year to 2.0% from 2.2%.
The Bank of Korea voted 6-1 to cut policy interest rates to 3.25% in October as uncertainties regarding the future path of output increased, while headline inflation in September undershot the bank's 2% target.
Reporting by Cynthia Kim
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