Korea Economic Outlook
November 17, 2020A preliminary estimate showed the economy contracted at a slower pace in annual terms in the third quarter as international trade ameliorated. Exports recovered significantly from the blow dealt by the pandemic in Q2, falling at a much softer rate. Moreover, fixed investment gained steam, growing at a faster pace than in Q2. Turning to Q4, the recovery is seen losing some steam amid surging Covid-19 cases abroad. That said, available indicators for the early part of the quarter are fairly positive: In October, the PMI reading pointed to the first improvement in manufacturing conditions this year, while consumer sentiment grew less pessimistic. Moreover, business confidence increased in November, pointing to sustained improvement in private sector activity. In other news, Joe Biden’s victory in the U.S. election sparked optimism regarding the future of the external sector, amid hopes that global tariffs will ease.
Korea Economic GrowthThe economy is set to contract this year as the pandemic hits both domestic and external demand. Going into 2021, an accommodative monetary policy and an expansionary fiscal stance are set to bolster domestic activity, boding well for the recovery. However, further outbreaks of Covid-19 threatening to delay the rebound in global trade pose cloud the outlook. FocusEconomics panelists see GDP growth at 3.3% in 2021, which is unchanged from the previous month’s forecast. For 2022, GDP is seen expanding 2.9%.
Korea Economy Data
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|Bond Yield||1.68||1.55 %||Dec 31|
|Exchange Rate||1,156||0.21 %||Dec 31|
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Korea Economic News
February 2, 2021
Consumer prices rose 0.76% in January over the previous month, picking up from the 0.16% increase seen in December.
February 1, 2021
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) increased to 53.2 in January from 52.9 in December, moving further above the 50-threshold that separates an improvement from a deterioration in the manufacturing sector over the previous month, and marking an almost 10-year high. The uptick came amid a faster increase in manufacturing output, stemming from solid internal and external demand as key industries such as automobiles and technology were vibrant.
February 1, 2021
Merchandise exports jumped 11.4% over the same month last year in January, following December’s 12.6% jump, amid solid increases in electric vehicle and tech sales, and surging demand from China, the U.S and the EU. Meanwhile, merchandise imports rose 3.1% over the same month last year in January (December: +2.2% yoy), marking the fastest pace since November 2018.
January 29, 2021
Industrial production increased 3.4% year-on-year in December (November: +0.5% yoy).
January 28, 2021
Business confidence among manufacturing firms came in at 81.0 in February, up from January's 77.0 and returning to December’s level.