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%.
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Korea Economic News
November 3, 2020
Consumer prices fell 0.56% in October over the previous month, contrasting September's 0.66% rise.
November 2, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose to 51.2 in October from September’s 49.8, crossing the 50-threshold that separates an improvement from a deterioration in the manufacturing sector over the previous month. The print came as both new orders and output surged at the fastest pace in over seven years on increasing demand from the U.S. and China.
Korea: Merchandise exports fall in October on fewer working days, although underlying momentum is robust
November 2, 2020
Merchandise exports edged down 3.6% on an annual basis in October, following September’s 7.6% upturn.
October 30, 2020
Industrial production increased 8.0% year-on-year in September (August: -2.6% yoy).
Korea: Business confidence hits highest reading since February but remains in pessimist territory in November
October 29, 2020
Business confidence in the manufacturing sector jumped to 76.0 in November from October's 68.0.