Investment in Korea
Korea - Investment
Preliminary estimate shows economy contracting at fastest pace since 2008 in Q2
A preliminary GDP release by the Bank of Korea shows the economy shrank 3.2% in seasonally-adjusted quarter-on-quarter (s.a. qoq) terms in Q2, following Q1’s 1.3% contraction, as the pandemic halted global trade, thereby hitting the key export sector hard. The print marks the sharpest contraction since Q4 2008. Moreover, the economy contracted 2.7% in annual terms in Q2, contrasting Q1’s 1.4% increase.
On the domestic front, the economy rebounded from the previous quarter, with private consumption growing 1.5% in Q2 (Q1: -6.5% s.a. qoq) as the virus was brought swiftly under control. Government consumption was up 1.1%, a slight deceleration from Q1’s 1.4% growth, but still marking a solid expansion amid stimulus measures. However, fixed investment lost ground on pervasive uncertainty, falling 0.4% in Q2, after having expanded 0.5% in Q1.
Exports of goods and services plunged 16.1% in Q2, significantly down from Q1’s 1.4% fall. Moreover, imports contracted 6.7%, which was down from Q1’s 3.6% decline.
Commenting on the outlook, Lloyd Chan, economist at Oxford Economics, noted:
“We expect the economy to rebound modestly in H2 2020, supported by a coordinated monetary and fiscal response, while the upturn in China’s economy should promote an export pick-up. But the recovery may be uneven without a vaccine. […] Renewed escalation of US-China tensions and South Korea’s trade dispute with Japan could pose further downside risks to growth.”
FocusEconomics panelists see the economy contracting 0.9% in 2020, which is down 0.1 percentage points from last month’s forecast, before growing 3.2% in 2021.
Korea - Investment Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Investment (annual variation in %) | 5.4 | 6.6 | 9.8 | -2.2 | -2.8 |
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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