SOUTH KOREA yesterday cut this year’s economic growth target to what would be a seven-year low as the prolonged U.S.-China tariff war hit global demand for the export powerhouse’s manufactured goods.

The worsening global outlook has prompted the government to slash its projections for exports for Asia’s fourth-largest economy in a sign policymakers will likely need to do more to prop up slumping activity.

The government now aims to achieve growth of between 2.4 percent and 2.5 percent this year, slower than the 2.6 percent to 2.7 percent range projected in its previous forecast in December, the finance ministry said in a scheduled mid-year update of its economic forecasts.

“The government will do its best to strengthen the readiness for our economy to make a strong recovery when the global economy reaches the point of up-turn,” Finance Minister Hong Nam-ki told a news conference, emphasizing that the current slowing was mainly due to weaker global growth.

In a dramatic change of its views, the government now expects exports to shrink 5 percent for the whole of this year, giving up an earlier projection for 3.1 percent growth.

The ministry also lowered forecasts on most other major indicators including private consumption, capital investment and construction spending.

“We’ve lowered the forecast as uncertainties over the trade war remain high amid the slowing global economy, while a recovery in the semiconductor sector that accounts for 20 percent of total exports is being delayed,” Lee Eog-won, director-general of the ministry’s economic policy bureau, told a briefing.

South Korea’s economy grew 2.7 percent in 2018 and the new growth target would be the slowest since a 2.4 percent expansion in 2012.

(SD-Agencies)