Bank of Korea Gov. Lee Ju-yeol briefs lawmakers on the state of the Korean economy in a parliamentary session on Feb. 23, 2021. (Photo: Yonhap News)
The South Korean economy is expected to recover at a modest pace while its job market recovers slowly as the coronavirus pandemic continues to hit the service sector, according to the head of the Bank of Korea.
In a report to the National Assembly on Tuesday, BOK Governor Lee Ju-yeol said, "The domestic economy continues to show a trend of modest recovery, mainly due to exports and investment, while consumption remains sluggish,"
He said the central bank will continue easing monetary policy to prop up the economy while working to stabilize financial markets, citing risks over imbalances from soaring asset prices and household debts.
Lee also told lawmakers that inflationary pressure remains weak due to the impact of the pandemic on consumer prices, but added that consumer prices are likely to rise above 1 percent down the line.
The BOK cut the key rate to the all-time low of 0.5 percent in May last year after delivering an emergency rate cut of half a percentage point in March last year to bolster the pandemic-hit economy.
Experts anticipate the central bank will deliver another rate freeze this week amid lingering uncertainty over a fresh surge of new virus cases across the country.
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