South Korea central bank says Japan's export curbs among top three economic risks

[SEOUL] South Korea's central bank on Tuesday said Japan's export curbs on key chip and display production materials were one of the top three risks to the domestic economy even after its recent downgrades to growth projections.

"Developments in the US-China trade negotiations, the speed of the global semiconductor industry's recovery and Japan's export restrictions are the main risks over the economic growth path," the Bank of Korea told the parliament in a scheduled report.

Japan said earlier this month it would tighten restrictions on exports of high-tech materials to South Korea, a move that Seoul sees as related to disputes over compensation for forced labour during World War Two.

The Bank of Korea last week cut the policy interest rate by 25 basis points to 1.50 per cent in a surprise move and trimmed this year's economic growth forecast to 2.2 per cent from 2.5 per cent seen in April, compared with an actual 2.7 per cent gain in 2018.

A copy of the central bank's report was distributed to reporters ahead of Governor Lee Ju-yeol's testimony at a parliamentary committee, due to start at 0100 GMT.

REUTERS