SEOUL, Apr 26: The OECD cut its forecast for South Korean growth this year to 3.5 percent from 3.8 percent, but maintained its forecast for 2013 at 4.3 percent and said monetary policy should be tightened once economic uncertainties cleared.
The Organisation for Economic Co-operation and Development (OECD) in a report on Thursday trimmed its 2012 inflation forecast for South Korea to 3.4 percent from 3.6 percent, while retaining its 2013 inflation forecast of 3.0 percent.
‘Given that Korea is entering the fourth year of an expansion… Monetary policy tightening should resume once the economy overcomes the current period of uncertainty,’ the Paris-based OECD said.
The Bank of Korea’s base rate has been at 3.25 percent since June last year.
In the longer term, the OECD said policymakers need to find ways to ensure continued growth despite a rapidly ageing population and to increase social spending for low-income groups. (agencies)
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