Economists downgrade GDP forecasts for South Korea after disappointing first-quarter data

Several economists, including one from U.S. banking giant J.P. Morgan, have downgraded their 2019 growth forecasts for South Korea, after an official estimate showed the north Asian economy unexpectedly shrank in the first quarter.

Bank of Korea surprised investors and analysts on Thursday by announcing that the economy contracted by 0.3% on a quarterly basis in the period from January to March this year. Compared to a year ago, the South Korean economy grew by 1.8% in the first quarter. That’s below the 2.5% expansion that projected.

Seok Gil Park, an economist at J.P. Morgan, now expects South Korea to grow by 2.4% for the full year, down from the previous projection of 2.6%.

Economists from ANZ wrote in a report that South Korean economic growth in 2019 will likely be lackluster. They downgraded the country’s growth for this year to 2.2% from their previous estimate of 2.5%.

Consultancy Capital Economics was even more pessimistic about the country’s prospects. Its economist, Alex Holmes, expects South Korea to grow by 1.8% this year — lower than his previous forecast of 2%.