On October 16, 2019, at its headquarters in Seoul, South Korea, the central bank made a significant announcement regarding its economic policy. The Bank of Korea decided to cut its benchmark interest rate by a quarter percentage point, bringing it down to 3%. This marks the second month in a row that the bank has acted to reduce borrowing costs and increase the money supply, responding to ongoing concerns about inflation and high household debt levels.

In its latest assessment, the Bank of Korea adjusted its GDP growth projections for both 2024 and 2025. The expected growth rate for next year was revised from 2.4% to 2.2%, and the outlook for 2025 was adjusted from 2.1% to 1.9%. These changes reflect the bank's acknowledgment of the economic struggles, which include weakening domestic consumption, a decline in exports, and jobs that are increasingly hard to come by.

Additionally, the Bank of Korea pointed to uncertainties in the global economy as significant factors affecting South Korea's outlook. It noted that trade tensions and policies from the newly reelected U.S. government, led by Donald Trump, could have a profound impact on South Korea's economy. In particular, Trump's proposed tariffs on imported goods might further challenge South Korea's exports, which could be more fragile than previously thought due to heightened global competition and increasing protectionist measures. Overall, while there is an optimistic view of a slight rebound in domestic consumption, the forecast for exports remains cautious.