Korea Economic Outlook
June 21, 2022After a Covid-19 wave dampened domestic demand in Q1 and caused GDP growth to slow, our panelists expect growth to weaken further in Q2. The industrial and external sectors—Korea’s main growth engines—have been hit by the war in Ukraine and the Covid-19 outbreak in China due to their effects on external demand, supply chains and Korea’s terms of trade. The manufacturing PMI and export growth in April–May averaged lower than in Q1. An eight-day long trucker’s strike in June caused further disruption; exports were down 12.7% year on year in the first 10 days of the month. That said, the services sector is likely supporting activity given falling unemployment and that most Covid-19 restrictions were removed in April; consumer confidence and retail sales held up well that month despite rising inflation. The USD 49.5 billion supplementary budget passed in May will further support activity.
Korea Economic GrowthGrowth will moderate to around its pre-pandemic average this year, due to a tougher base effect, rising energy prices, global supply bottlenecks and higher interest rates. Some support will be provided by relaxed Covid-19 restrictions and fiscal spending. Risks include high household debt levels, further energy price swings and a potential housing market slowdown. FocusEconomics panelists see GDP growth at 2.7% in 2022, which is down 0.1 percentage points from the previous month’s forecast. For 2023, GDP is seen expanding 2.4%.
Korea Economy Data
5 years of Korea economic forecasts for more than 30 economic indicators.
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Korea Economic News
September 1, 2022
Merchandise exports climbed 6.6% on an annual basis in August (July: +9.2% year-on-year).
August 31, 2022
Industrial output grew 3.0% year on year in seasonally-adjusted terms in July (June: +4.6% s.a.
August 25, 2022
At its meeting on 25 August, the Bank of Korea (BOK) raised the base rate by 25 basis points to 2.50%, taking rates to five times where they were since the hiking cycle began in August last year.
August 23, 2022
Consumer confidence rose to 88.8 in August from July's 86.0.
August 2, 2022
Consumer prices rose 0.48% in July over the previous month, which was below June's 0.61% rise.