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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|Bond Yield||1.68||1.55 %||Dec 31|
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Korea Economic News
June 2, 2022
The S&P Global Manufacturing Purchasing Managers' Index (PMI) came in at 51.8 in May, down from April's 52.1.
June 2, 2022
Merchandise exports jumped 21.3% year-on-year in May, on the heels of April’s 12.9% jump.
June 2, 2022
Consumer prices increased 0.66% in May over the previous month, which was below April's 0.74% rise.
May 31, 2022
Industrial output rose 3.7% compared to the same month a year earlier in April in seasonally-adjusted terms, which followed March's 5.5% increase.
May 26, 2022
At its meeting on 26 May, the Bank of Korea (BOK) raised the base rate by 25 basis points to 1.75%.