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IMF cuts South Korea 2015-2016 growth forecasts

[SEOUL] The International Monetary Fund cut its forecast for South Korea's 2015 economic growth to 3.7 per cent from a previous 4.0 per cent, its report prepared for the G20 finance chiefs' meeting showed on Friday.

The revised forecast is still higher than a 3.4 per cent projection set in January by South Korea's central bank and close to 3.8 per cent set by the country's finance ministry. Asia's fourth-largest economy grew 3.3 per cent in 2014.

The IMF cut its world economic growth forecast to 3.5 per cent on Jan. 20 from the previous 3.8 per cent but did not release new forecasts for most countries including South Korea at that time.

The relatively modest downgrade in the IMF's growth forecast for South Korea comes as the finance ministry's upbeat remarks in recent weeks raised speculation that the Bank of Korea will not cut interest rates for a while despite majority views among analysts for a cut soon.

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The IMF also revised down its 2016 growth forecast for South Korea to 3.9 per cent from the previous 4.0 per cent, according to the report prepared for next week's meeting of finance ministers and central bank chiefs from the 20 major economies in Istanbul.