S. Korean economy faces ‘increasing’ downside risks amid construction slump, trade tariffs. South Korea’s economy facing \”increasing\” downside risks due to a prolonged slump in the construction sector and worsening export conditions. Concerns over a global trade war intensified as U.S. President Donald Trump has escalated tariff measures against major trading partners in an effort to reduce America’s trade deficits and achieve broader policy goals. The Bank of Korea slashed its benchmark interest rate by a quarter percentage point to shore up economic growth affected by domestic political turmoil and the Donald Trump administration’s sweeping tariffs. The move came a month after its rate freeze decision, which was aimed at supporting the weak local currency while assessing the impact of two rate cuts in the October and November meetings. The KDI has now noted downside risks for three consecutive months, reports Yonhap news agency. The impact of political uncertainty has partially eased, but worsening external conditions continue to weigh on the nation’s export-dependent economy. The think tank pointed out that consumer and business sentiment indicators suggest the economy is gradually recovering from the shock caused by President Yoon Suk Yeol’s brief imposition of martial law in December.