"South Korea's Economic Growth Rate Forecasted at 2.6% This Year"…Hyundai Research Lowers by 0.2%P

Container unloading operations are underway at Busan Port Gamman Pier

[Asia Economy Reporter Choi Dae-yeol] The Hyundai Research Institute announced on the 17th that South Korea's annual economic growth rate this year is expected to be around 2.6%, which is 0.2 percentage points lower than the previous forecast.

In the economic weekly report released that day, the institute stated, "Due to the weakening economic recovery in major countries, global inflation, and base effects, domestic net exports are expected to decline significantly," and added, "Domestically, social distancing policies will be eased, and the growth contribution from the government sector will decrease." It further noted, "The overall economic trend this year is expected to show a top-heavy pattern with a stronger first half and a weaker second half, leading to a downward revision of the annual economic growth rate from the previous 2.8% to 2.6%."

The institute diagnosed that although the economic recovery has continued since the fourth quarter of last year, concerns about a slowdown in the recovery have increased as the cyclical component of the leading economic index has fallen for eight consecutive months. Inflationary pressures have also intensified. Externally, the prolonged Russia-Ukraine war and shifts in major countries' monetary policies are expected to weaken the economic recovery.

While stating that "domestic and external risks are accumulating, raising the possibility of economic slowdown," the institute explained, "If active policy efforts accompany factors such as the expected effects of the new government’s inauguration, efficiency of fiscal policy, strengthening of livelihood economic stability, stabilization of supply chains and expansion of export bases, and enhancement of foreign exchange and financial market stability, growth in the high 2% range is also possible."

This content was produced with the assistance of AI translation services.