Korea Economic Outlook
October 18, 2016The Korean economy continues to be affected by multiple downside risks both at home and abroad, including strikes at major carmakers, ongoing corporate restructurings and the increased probability of a U.S. Federal Reserve interest rate hike. Samsung’s recent product recall and production scrap of a smartphone model could heap further pressure on the country’s economy, though the extent of the impact will largely depend on other Korean manufacturers’ ability to absorb the newfound demand. In order to shore up growth and meet its economic growth target of 2.8% by year-end, in early October the government unveiled a set of fiscal stimulus measures worth USD 8.9 billion to be implemented in the fourth quarter. This will likely translate into higher consumer sentiment, which stabilized in September following two consecutive months of improvement. Other recent data paint a bleaker picture: in October, business confidence was up a notch but remained firmly entrenched in pessimistic territory, while the PMI tumbled to a 14-month low in September.
Korea Economy Data
5 years of Korea economic forecasts for more than 30 economic indicators.
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|Bond Yield||1.63||0.81 %||Oct 21|
|Exchange Rate||1,135||0.66 %||Oct 21|
|Stock Market||2,033||-0.37 %||Oct 21|
Korea Economic Growth
October 18, 2016Surging levels of household debt and uncertainty regarding the effect of Samsung’s crisis on the economy and the timing of U.S. interest rate normalization are severely weighing on economic activity. Nonetheless, Korea’s massive stimulus packages will continue to boost household spending and fixed investment, driving growth this year. Forecasters expect GDP to grow 2.6% in 2016, which is unchanged from last month’s forecast. Next year, analysts expect growth to stabilize at 2.6%.
Korea Economic News
October 13, 2016
At its 13 October monetary policy meeting, the Bank of Korea (BoK) announced that it will hold the base rate constant at a record low of 1.25%, which was largely in line with market expectations.
October 5, 2016
In September, consumer prices rose 0.6% over the previous month, which contrasted the 0.1% decrease in August and overshot the 0.2% increase the markets had expected.
October 3, 2016
Korea’s Customs Services reported that exports totaled USD 40.9 billion in September, which represented a 5.9% contraction over the USD 43.4 billion recorded in the same month last year.
September 30, 2016
The forward-looking business confidence indicator (BSI) for the manufacturing sector produced by the Bank of Korea (BoK) rose from 74 points in September to 75 points in October.
September 30, 2016
In August, industrial production accelerated and expanded 2.3% year-on-year, which was up from both the 1.6% increase registered in July and the 1.6% rise the markets had expected.