Daijiworld Media Network – Seoul

Seoul, Feb 27: South Korea's central bank on Tuesday slashed interest rates and downgraded its annual growth forecast, citing economic concerns stemming from US trade tariffs and the fallout from President Yoon Suk Yeol’s brief martial law declaration last year.

The Bank of Korea now expects GDP to grow 1.5% in 2025, down from its earlier 1.9% estimate. It also announced a rate cut from 3.00% to 2.75% to stimulate domestic demand, which weakened following Yoon’s controversial martial law move.

Adding to economic uncertainties, US President Donald Trump's aggressive trade policies have raised alarms. His administration has imposed 25% tariffs on steel and aluminum imports and warned of similar or higher levies on automobiles, semiconductors, and pharmaceuticals—sectors crucial to South Korea’s economy.

With chip giants Samsung and SK hynix and a strong steel export industry, South Korea faces heightened economic risks as global trade tensions escalate.