[Yonhap News Photo]
South Korea's political uncertainties over an unfolding influence-peddling scandal could increase downside risks to the country's economic growth, a report said Wednesday.
Citigroup said the scandal involving President Park Geun-hye's longtime confidante could shrink consumer sentiment, which in turn could further slow the economic growth rate in the fourth quarter, according to the report released by the Korea Center for International Finance.
In the July-September period, South Korea's gross domestic product increased 0.7 percent from the previous quarter, decelerating from a 0.8 percent on-quarter expansion three months earlier, according to preliminary data from the Bank of Korea.
Citigroup also said the political uncertainties could have limited influences on the country's financial markets, noting major political issues in the past, including the 2004 impeachment of then liberal President Roh Moo-hyun, had no significant impact on the financial markets.
British investment bank Barclays said South Korea could place its policy priority on stabilizing the markets for the time being due to political uncertainties.
(Yonhap)
reporter
Park Sae-jin
swatchsjp@ajunews.com
