July 23, 2019 / 1:14 AM / a month ago

South Korea central bank says Japan's export curbs among top three economic risks

FILE PHOTO: The logo of the Bank of Korea is seen on the top of its building in Seoul, South Korea, March 8, 2016. REUTERS/Kim Hong-Ji/File Photo

SEOUL (Reuters) - South Korea’s central bank on Tuesday said Japan’s export curbs on key chip and display production materials were one of the top three risks to the domestic economy even after its recent downgrades to growth projections.

“Developments in the U.S.-China trade negotiations, the speed of the global semiconductor industry’s recovery and Japan’s export restrictions are the main risks over the economic growth path,” the Bank of Korea told the parliament in a scheduled report.

Japan said earlier this month it would tighten restrictions on exports of high-tech materials to South Korea, a move that Seoul sees as related to disputes over compensation for forced labor during World War Two.

The Bank of Korea last week cut the policy interest rate by 25 basis points to 1.50% in a surprise move and trimmed this year’s economic growth forecast to 2.2% from 2.5% seen in April, compared with an actual 2.7% gain in 2018.

A copy of the central bank’s report was distributed to reporters ahead of Governor Lee Ju-yeol’s testimony at a parliamentary committee, due to start at 0100 GMT.

Reporting by Choonsik Yoo; Editing by Sam Holmes

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