Korea Economic Outlook
August 25, 2020
Preliminary data revealed the economy contracted markedly in Q2 as Covid-19 took its toll. Investment lost steam as the pandemic sowed uncertainty, while exports of goods and services plunged as external demand weakened against the backdrop of lockdowns enacted globally. However, private consumption rebounded somewhat from Q1’s contraction, partly cushioning the downturn. More recently, exports plunged in the first half of the third quarter when compared to last year, on weaker demand from China and Vietnam. That said, unemployment edged down in July and business confidence rose in August, pointing to a slow economic recovery thus far in Q3. Less positively, the government imposed new restrictions to limit gatherings in the capital area due to a resurgence in Covid-19 cases in August. While this is unlikely to derail the recovery, the possibility of further measures poses a threat.Korea Economic Growth
The economy is expected to contract this year as Covid-19 bites both domestic and external demand. Nevertheless, an accommodative monetary policy stance and comprehensive fiscal stimulus should support activity somewhat. Potential prolonged weakness in external demand and further social distancing measures pose downside risks. FocusEconomics sees a contraction in the economy of 0.9% in 2020, which is down 0.1 percentage points from last month’s forecast, before growth of 3.2% in 2021.Korea Economy Data
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Korea Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 1.68 | 1.55 % | Dec 31 |
| Exchange Rate | 1,156 | 0.21 % | Dec 31 |
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Korea Economic News
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Korea: Merchandise exports decline at sharp rate in August, although underlying picture is more positive
September 1, 2020
Merchandise exports fell 9.9% in annual terms in August (July: -7.1% year-on-year) amid still-tepid external demand.
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Korea: Manufacturing PMI marks the highest reading since February in August
September 1, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose to 48.5 in August, from 46.9 in July, closing in on the 50-threshold that separates an improvement from a deterioration in manufacturing conditions, and marking the highest reading since February. August’s result was due to a more modest reduction in output as well as a moderation in the decline in new orders.
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Korea: Preliminary estimate shows economy contracting at fastest pace since 2008 in Q2
September 1, 2020
A preliminary GDP release by the Bank of Korea shows the economy shrank 3.2% in seasonally-adjusted quarter-on-quarter (s.a.
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Korea: Industrial activity deteriorates in July
August 31, 2020
Industrial output decreased 2.5% year-on-year in July, after dropping 0.5% in June, according to the latest release from the National Statistics Office for Korea.
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Korea: BOK keeps rates at all-time low in August, downgrades outlook
August 27, 2020
At its meeting on 27 August, the Bank of Korea (BOK) kept its base rate at 0.50%, in line with market expectations. The Bank’s decision to hold rates follows disappointing economic data, with both the recovery abroad and private consumption at home losing steam.
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