South Korea's economy is expected to grow 1.4 percent this year, with the country's central bank anticipated to lower its key rate twice in 2024, an economist at S&P Global Ratings said Sunday.

The growth forecast by Rajiv Biswas, the chief economist of Asia-Pacific at S&P Global Market Intelligence, comes in line with the South Korean government's projection made in July.

Biswas attributed South Korea's sluggish economic growth in 2023 to the Bank of Korea's aggressive monetary tightening policy implemented the previous year, which resulted in various challenges across the economy, including the real estate sector.

South Korea's central bank held its key interest rate steady at 3.5 percent last month for the fifth straight time as it weighs a slowdown in growth amid moderating inflation. The rate freezes came after it delivered seven consecutive rate hikes from April 2022 to January 2023.

Biswas also noted the central bank is expected to slash its key rate starting the first half of 2024 in line with the US monetary policy.

Regarding exports, the economist added the weaker global demand for semiconductors and display products recently dealt a harsh blow to South Korea's exports.

Biswas also pointed out that although the sluggish Chinese economy has put pressure on South Korea's outbound shipments, the decline is expected to be limited by the recovery in global demand for chips from other nations.

The economist further recommended that South Korea redirect its focus toward India and Southeast Asian countries as new partners amid the decelerating Chinese economy. (Yonhap)