SEOUL: South Korea鈥檚 finance minister warned that an all-out trade war between the US and China would have grim implications for the country, as he lowered this year鈥檚 growth outlook Wednesday.
The world鈥檚 11th largest economy is expected to grow 2.9 percent this year, lower than an earlier estimate of three percent, Kim Dong-yeon said, citing slowing demand at home and abroad as well as rising unemployment.
The latest estimate is also lower than last year鈥檚 figures, when the export-reliant economy expanded 3.1 percent, and comes as the South鈥檚 top two trading partners China and the US engage in a bitter spat that has seen them impose hefty tariffs on billions of dollars in goods.
鈥淭he economic situation down the road does not seem to be bright,鈥� Kim told reporters.
鈥淭he situation may get worse if anxiety in the international financial markets spreads due to the US-China trade dispute... and market and corporate sentiment does not improve,鈥� he said.
Overseas shipments account for more than half of the South鈥檚 economy, with more than a quarter of exports shipped to China and about 12 percent to the US.
Kim vowed to 鈥渃losely monitor international trade situations including the US-China trade row鈥� and announced measures to encourage job creation and spur domestic spending.
US President Donald Trump has taken a confrontational 鈥淎merica First鈥� stance on trade policy, imposing steep tariffs on steel and aluminum, which angered allies and prompted swift retaliation, as well as 25 percent duties on $34 billion of Chinese goods, with more on the way.
China has matched US tariffs dollar-for-dollar and threatened to take further measures, while US exports face retaliatory border taxes from Canada, Mexico and the European Union.
The International Monetary Fund said this week the growing trade confrontation is the 鈥済reatest near-term threat to global growth鈥� and in the worst case could cut a half point off world GDP.