Korea Economic Outlook
February 25, 2020The outlook for the first quarter moderated in recent weeks as the coronavirus outbreak has disrupted supply chains and is expected to weigh heavily on Chinese demand for Korean manufactured goods. That said, growth should remain robust thanks to strong household spending, buttressed by gains in employment and as consumer confidence hit a 19-month high in January. Moreover, fixed investment should have benefited from higher business sentiment in February and strong government spending targeted at supporting the private sector. This follows Q4’s acceleration which was propelled by a robust external sector. In other news, government officials are expected to unveil an emergency spending plan to counter the impact of the coronavirus. President Moon Jae-in announced USD 365 million in loans to support the tourism and shipping sectors in early February. The next round of stimulus is expected to prop up export-oriented firms. This comes as the number of cases in Korea jumped in recent days prompting a number of nations to tighten travel restrictions to Korea.
Korea Economic GrowthThis year, economic growth is expected to accelerate slightly due to a recovery in fixed investment and as the technology and construction sectors strengthen. Nevertheless, weaker-than-expected growth in China, the coronavirus outbreak in the region and political tensions with Japan pose major downside risks. FocusEconomics panelists project the economy will grow 2.1% in 2020, which is down 0.1 percentage points from last month’s forecast, and 2.4% in 2021.
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|Bond Yield||1.68||1.55 %||Dec 31|
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Korea Economic News
April 1, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) sank to 44.2 in March from 48.7 in February, moving further below the 50-threshold that separates an improvement from a deterioration in the manufacturing sector over the previous month. March’s print was driven by the sharpest fall in output in over 11 years, due to both supply and demand-side disruptions hampering production schedules.
April 1, 2020
Merchandise exports decreased 0.2% year-on-year in March, contrasting the 4.3% rise recorded in February, totaling USD 46.9 billion in March (February: USD 41.2 billion).
March 31, 2020
Industrial production, which includes output from the mining, manufacturing, and electricity and gas sectors, increased 11.4% year-on-year in February, contrasting January’s 2.6% fall.
Korea: Government passes supplementary budget and proposes additional emergency spending to combat Covid-19
March 25, 2020
Policymakers have needed all hands on deck in recent weeks, as the global spread of Covid-19 has weighed heavily on all aspects of the Korean economy.
March 24, 2020
On 19 March, the Korean won (KRW) ended the day at 1,285 per USD, marking the lowest level since 14 July 2009.