SEVERAL economists, including one from U.S. banking giant JP Morgan, have downgraded their 2019 growth forecasts for South Korea, after an official estimate showed the northern Asian economy unexpectedly shrank in the first quarter.

The country’s central bank, the Bank of Korea, surprised investors and analysts last week by announcing that the economy contracted by 0.3 percent on a quarterly basis in the period from January to March this year. None of the economists polled previously had foreseen a contraction.

Compared to a year ago, the South Korean economy grew by 1.8 percent in the first quarter, according to the central bank’s advance estimate. That’s below the 2.5 percent expansion that the poll had projected.

The disappointing economic performance in the first quarter led at least three economists to revise downward their annual growth forecasts for South Korea.

Seok Gil Park, an economist at JP Morgan, said the South Korean economy will likely “rebound strongly” in the following quarters. Still, the disappointing first quarter will drag down the country’s 2019 growth, Park wrote in a note after the data release.

The economist now expects South Korea to grow by 2.4 percent for the full year, down from the previous projection of 2.6 percent. The north Asian economy had grown by 2.7 percent in 2018.

Others have penciled in a more severe slowdown. Economists from Australian bank ANZ wrote in a report that South Korean economic growth in 2019 will likely be lackluster. They downgraded the country’s growth for this year to 2.2 percent from their previous estimate of 2.5 percent.

“There are reasons to think the first quarter may have marked the bottom for South Korea’s growth,” ANZ said, citing indicators that pointed to a likely pickup in global semiconductor sales — a major product that the country exports.

“Nonetheless, the big picture is that South Korea’s growth will likely be lackluster in 2019 and any recovery is expected to be gradual,” the bank explained.

Consultancy Capital Economics was even more pessimistic about the country’s prospects. Its economist, Alex Holmes, wrote in a report that he expects South Korea to grow by 1.8 percent this year — lower than his previous forecast of 2 percent.

(SD-Agencies)