Bank chief says South Korea's growth to slow

That would be slower than growth of 5 percent in 2007 and down from an earlier forecast of gross domestic product of 4.7 percent in 2008.

"It seems like the economy is unlikely to surpass the 4.5 percent growth this year; it could come even below that level," Bank of Korea Gov. Lee Seongtae said at a news conference following the central bank's decision to hold its key interest rate steady at 5 percent.

The bank earlier announced that it would keep its benchmark seven-day repurchase rate unchanged for a ninth straight month due to soaring import costs and looming signs of an economic slowdown. The outcome, at a monthly policy meeting, was widely expected.

The government has repeatedly expressed its hope for a lower interest rate to fuel domestic demand after plans for a 4.9 trillion won ($4.7 billion) supplementary budget were postponed.

But the central bank kept its key policy rate unchanged due to high inflation. Seven of 11 economists recently polled by Dow Jones Newswires had expected the central bank to hold steady; the other four had forecast a reduction of 25 basis points.

South Korea's consumer price index rose 4.1 percent in April from the same month last year, staying above the central bank's inflation target range of 2.5 percent to 3.5 percent for a fifth consecutive month.

BOK Gov. Lee said on-year growth in the country's consumer price index is likely to remain above 3.5 percent for several months.

___

Dow Jones Newswires contributed to this report