The Bank of Korea(BOK) assessed that economic uncertainty is high due to Pyongyang's nuclear program and that household debt is dragging down consumption and growth. 

Nevertheless, the BOK predicted that housing prices will remain stable for the time being and downplayed concerns that a U.S. interest rate hike would trigger capital outflows from the Korean financial market.
  
The central bank delivered the diagnosis in a report to the parliamentary strategy and finance committee on Monday.

It said that the South Korean economy will grow in the two-percent range this year backed by a global economic recovery and the government's supplementary budget, but added that its growth track remains uncertain.
 
The bank counted North Korea-related geopolitical risks, trade conflicts between the U.S. and China as well as as Beijing’s retaliatory measures over the deployment of the THAAD antimissile system as major uncertainties facing the nation. 

The latest assessment is somewhat different from the central bank’s previous position revealed in mid-July.
 
At the time, it forecast that the nation’s exports would improve thanks to a global economic recovery and that domestic consumption would expand due to improving sentiment.
 
It had also predicted that the economy would grow two-point-eight percent this year without counting the effect of the supplementary budget.
 
However, the BOK said in the new report that this year’s economic growth rate will be lower than the government’s prediction of three percent even after reflecting the supplementary budget. 
 
Given the shift in stance, the central bank appears to be putting more weight on keeping its key interest rate unchanged on Thursday.