Korea Economic Outlook
December 16, 2021After restrictions and a less favorable base effect triggered a slowdown in growth in Q3, prospects appear brighter in Q4: Industrial production rebounded and retail sales accelerated in October, while consumer confidence improved in the first two months of the quarter as the country saw looser restrictions from 1 November. Externally, exports were buoyant in October–November. That said, headwinds persist as the manufacturing PMI clocked softer expansions in October–November, while business sentiment has deteriorated in the quarter. Meanwhile, a recent surge in Covid-19 cases led to tighter restrictions nationwide from December, which will temper growth in the last month of Q4. Moreover, the first Omicron case in the country was reported in early December, creating further uncertainty around the health situation, which will likely continue to weigh on business confidence.
Korea Economic GrowthGDP should grow at a healthy pace next year. Supportive fiscal spending—as indicated by the 2022 budget—solid private consumption and a buoyant external sector should be the key drivers of growth. That said, the normalization of monetary policy amid indebted households and rising Omicron cases pose downside risks. FocusEconomics panelists see GDP growth at 3.0% in 2022, which is down 0.1 percentage points from the previous month’s forecast. For 2023, GDP is seen expanding 2.6%.
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
January 14, 2022
At its meeting on 14 January, the Bank of Korea (BoK) raised the base rate by 25 basis points to 1.25%.
January 3, 2022
Consumer prices increased 0.16% from the previous month in December, coming in below the 0.50% increase logged in November.
January 3, 2022
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) rose to 51.9 in December from November's 50.9.
January 2, 2022
Merchandise exports soared 18.3% annually in December (November: +32.0% year-on-year).
December 30, 2021
Industrial production expanded 5.9% year-on-year in November (October: +4.5% yoy).