SEOUL: Global credit appraiser Fitch Ratings said Friday it has cut its 2021 growth outlook for the South Korean economy to 4 percent due mainly to the latest surge in COVID-19 cases.
The latest outlook is a 0.5 percentage-point drop from its earlier estimate of 4.5 percent growth for Asia’s fourth-largest economy, report agencies.
“Nevertheless, the fast pace of the vaccine rollout means that prospects for the economy heading into the fourth quarter and 2022 remain favorable,” it added.
Despite the downward revision, Fitch’s outlook is on par with the forecast of the Bank of Korea (BOK). The Korean government expects growth of 4.2 percent this year.
“Exports growth will likely weaken in the coming months as demand for durable goods fades, but huge backlogs of orders will keep Korean manufacturers busy,” Fitch said.