South Korea faces a weak economic growth forecast this year as most of its key indexes are likely to end low, affected by the Middle East respiratory syndrome in the second quarter and the overall slowdown in China’s economy.

The country’s growth rate is expected to sink back into the 2 percent range, the trade volume to drop below 1 trillion won ($865 million), and the inflation rate to hit a record low since the Asian financial crisis in the late 1990s.

Leading economic institutes have revised their forecast for this year’s growth rate to the 2 percent range -- the central Bank of Korea to 2.7 percent, LG Economic Research Institute to 2.6 percent and Hyundai Research Institute to 2.4 percent. International organizations such as the Organization for Economic Cooperation and Development and International Monetary Fund, too, have suggested 2.7 percent.

“We shall work to attain the government’s target growth rate of 3.1 percent, but there are downside risks,” said Finance Minister Choi Kyung-hwan in a parliamentary session last week, admitting the possibility of a 2 percent range figure.

The ministry had lowered the growth forecast by 0.7 percentage points from 3.8 percent in late June, amid weak domestic consumption caused by the MERS outbreak. The actual growth rate for last year was 3.3 percent.

Also, the BOK said the annual inflation rate would stay around a record low of 0.7 percent, which is even lower than the 0.8 percent during the 1998 financial crisis.

The increased tobacco price pulled up the index slightly by 0.58 percent, but the negative consequences of falling oil prices were much more conspicuous, according to the central bank.

The nation’s trade volume is expected to dip for the first time in three years, reflecting the slow growth of China, its No. 1 trading partner. The amount is also likely to fall below the 1 trillion won line for the first time in five years.

As of the end of October, the total trade volume stood at $808 billion won, down 11.9 percent from the same period last year.

By Bae Hyun-jung (tellme@heraldcorp.com)