Korea Economic Outlook
September 21, 2021After accelerating in annual terms in Q2, economic growth has likely slowed in Q3: The economy is facing headwinds from an outbreak of the virus that began in early July, which eventually led to the imposition of the highest level of restrictions in Greater Seoul, and, later in August, in Busan—the country’s second largest city. Despite some loosening in the capital region in early September, restrictions are still relatively tough overall. That said, upbeat consumer confidence and lower unemployment point to resilient private consumption in the quarter. Externally, merchandise exports kept some momentum in July–August, but soaring imports led to a shrinking trade balance. In other news, the government recently tabled its draft 2022 budget, which sees expenditure rising by 8.3% to USD 37.4 billion, increasing the fiscal deficit from its projected level in 2021.
Korea Economic GrowthAfter an expected robust expansion in 2021, the economy should continue to grow healthily in 2022. Sustained fiscal support, resuming private consumption and a buoyant external sector should be the key drivers of growth. That said, downside risks stem from indebted households suffering from higher financing costs as the Bank of Korea normalizes policy. FocusEconomics panelists see GDP growth at 4.0% in 2021. For 2022, GDP is seen expanding 3.0%, which is unchanged from last month’s estimate.
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Korea Economic News
October 27, 2021
Consumer confidence rose to 103.8 in September from August's 102.5.
October 12, 2021
At its meeting on 12 October, the Bank of Korea (BoK) kept the base rate at 0.75%, following a 25 basis-point hike in late August.
October 6, 2021
Consumer prices increased 0.50% in September over the previous month, below August's 0.63% increase.
October 1, 2021
Merchandise exports jumped 16.7% on an annual basis in September, following August’s 34.8% upturn.
October 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) rose to 52.4 in September from August's 51.2.