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Falling prices in Korea a warning for global growth
Organization: Department of International Cooperation        Publish Date: 2019-10-05 14:07
The first experience of price declines in South Korea is the latest signal of the strains felt by trade-dependent economies across the globe as they battle to support growth, in spite of plunging exports. Inflation last month fell below zero as exports from South Korea, a bellwether for world trade especially in some tech sector, registered another double-digit decline for the tenth consecutive month.

Price weakness and the continuing decline in exports have squeezed private investment by companies and inflation expectations among households in South Korea.
Exceptionally high food prices last year are part of the reason the current inflation numbers look soft, a factor that has provided government officials with a reason to downplay the risk of price falls becoming entrenched.

Bank of Korea Governor Lee Ju-yeol also dismissed concerns of a deflation as excessive, saying that price growth would pick up toward 1 percent next year. However, he has also mentioned that due to the downside risks resulting from the global slowdown, it is difficult for the central bank to maintain its 2.2 percent growth projection for this year. Most economists predict the central bank will lower interest rates this month or next month.

Source: Economic Daily Times, Taipei Times
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