DOWNSIDE risks in South Korea’s economy are outweighing upside ones, making it increasingly hard for the central bank to maintain its growth forecast that was already cut earlier this year, according to Governor Lee Ju-yeol.

The Bank of Korea in July reduced interest rates for the first time in three years and lowered its growth projection to 2.2% after assessing the impact of the US-China trade war on South Korea, which relies heavily on exports such as memory chips for expansion.

Even though the US and China are set to resume trade talks, a slowdown in the global economy is likely to persist and it’ll be some time before demand for memory chips picks up again, Mr. Lee told reporters on Friday evening.

“It will be tough to achieve the 2.2% growth projection,” Mr. Lee said. “Downside risks have been bigger than upside risks in the two months since our July forecast.”

South Korea’s economy is expected to expand 2% this year, the slowest pace since the global financial crisis, according to a Bloomberg survey of economists. Exports, the biggest growth driver, are headed for a 10th monthly decline, while consumer prices in August failed to gain for the first time ever.

Inflation will probably be below zero for “a couple of months,” Mr. Lee said, dismissing concerns about deflation as “excessive.” He blamed a potential negative reading for this month partly on the base effect from higher-than-usual food prices last year.

The central bank maintains an “accommodative” stance and will look at “every set of data possible” until the next rate decision scheduled for Oct. 16, Mr. Lee said. The U.S.-China trade spat and memory-chip exports, which account for roughly one fifth of overseas shipments, are the two most important factors he’s looking at, he said. — Bloomberg

WHEN Christine Lagarde takes charge of the European Central Bank, she’ll inherit the policy disputes of her predecessors — now with even deeper scars.

The new president will have to confront the aftermath of an unprecedented revolt among officials over Mario Draghi’s plan to reactivate quantitative easing. In a move probably linked to that, Germany’s Sabine Lautenschlaeger unexpectedly quit the Executive Board.

While such discord is reminiscent of when Mr. Draghi became president in 2011 after resignations by other German policy makers, the cumulative bruises from years of arguments present a challenge to Ms. Lagarde. She’ll need to determine how to lead the Governing Council while broaching inevitable disagreements, and to look at how to accommodate discord when it arises.

“The differences between the majority group and the hawkish group seems quite stark,” said Nick Kounis, an economist at ABN Amro in Amsterdam. “I don’t think she has a magic wand to make people who fundamentally disagree agree.”

Mr. Draghi has encountered dissent before, but never to such a degree. Bundesbank President Jens Weidmann and Klaas Knot of the Netherlands immediately criticized the Sept. 12 QE decision. Last week, Bank of France Governor Francois Villeroy de Galhau publicly declared his own disagreement, and Ms. Lautenschlaeger resigned.

The president was left relying on support mainly from southern Europe and the euro’s smallest economies, at a meeting described by one participant as the most tense he can remember. He spoke on condition of anonymity, because such discussions are private.

Ms. Lagarde can survey the wreckage first hand when she starts work in November.

She has already faced a call from Austrian policy maker Robert Holzmann to allow the views of individuals to be cited in accounts of meetings to acknowledge differences. That would be a step toward the openness of the Bank of England and US Federal Reserve, which publish votes.

Such moves could go some way toward accommodating dissent while ensuring that, as Mr. Draghi said last week, disagreements don’t undermine policy decisions.

Even a safety valve to vent views might not be enough. Ms. Lagarde may also need to find a different way of initiating policy moves from Mr. Draghi, who often signaled major measures publicly without formal discussions with his colleagues first.

“It would probably be a mistake to try and emulate Draghi’s approach,” said Richard Barwell, an economist at BNP Paribas Asset Management.

While Ms. Lagarde signaled in an interview last week that she’ll seek “teamwork” from her colleagues, she may also need to embrace more engagement than Mr. Draghi did — and maybe share responsibility with her chief economist, Philip Lane.

That might help accommodate those who think their experience means they know better. She has never been a central banker, having served as French finance minister and led the International Monetary Fund.

Lowering the temperature will surely assist Mr. Lagarde if she wants to unveil further timely stimulus. More bond purchases could require the ECB to scrap self-imposed limits intended to safeguard against monetary financing — a key principle for the Germans.

However, more discussion could slow down policy making in the already unwieldy group of 25 policy makers, including the six-member Executive Board.

“She will try to build a consensus,” said Mr. Barwell. “The center of gravity within the Council should therefore shift back toward the governors, away from the board — dragging the reaction function of the ECB with it.” — Bloomberg