The Ministry of Trade and Industry (MTI) maintains its forecast for economic growth this year

The Ministry of Trade and Industry (MTI) has maintained its economic growth forecast for the year at between 0% and 2%.

MTI said that the economy grew by 3.9% year-on-year in the previous quarter, performing slightly better than expected but slower compared to the prior quarter; on a seasonally adjusted quarter-on-quarter basis, it contracted by 0.6%.

Among the sectors, manufacturing growth slowed to 4% year-on-year; construction activity accelerated to 5.5% year-on-year expansion; and services sector growth decelerated to 3.6% year-on-year.

Authorities analyzed that increased inventory ahead of the implementation of U.S. tariffs contributed to growth in areas such as wholesale trade, manufacturing, and finance and insurance, which partly drove economic expansion.

MTI noted that while current trade tensions have eased slightly, and the outlook for external demand has improved modestly, with both the U.S. and Chinese economies expected to perform somewhat better than previously anticipated, the global economic outlook remains uncertain, with risks tilted to the downside.

This is mainly due to the possibility of sharper-than-expected declines in economic activity, potential escalation of tariff tensions, disruptions to the global inflation-control process, and the risk of recessions in both developed and emerging economies.

In this context, MTI decided to keep its economic growth forecast unchanged.