Bloomberg "Korea's Q1 Economic Growth at 0.1%... Near Recession"

A survey result showed that the South Korean economy approached a recession in the first quarter.

Containers are piled up at the Busan Port Sinsundae Pier yard.
[Image source=Yonhap News]

Bloomberg News reported on the 18th that in a monthly survey conducted from the 11th to the 17th targeting market economists, 14 respondents expected South Korea's first-quarter Gross Domestic Product (GDP) to have increased by 0.1% (median) compared to the previous quarter. This is lower than the 0.3% growth forecast from the previous survey. The growth forecast for the second quarter remained unchanged at +0.5%.

South Korea's real GDP growth rate compared to the previous quarter had already turned negative (-0.4%) in the fourth quarter of last year due to sluggish exports. If the economy contracts for two consecutive quarters, it is technically considered to be in a recession.

Bloomberg also reported that according to six respondents, the probability of a recession occurring within the next 12 months was assessed at 25%.

Park Jung-woo, an economist at Nomura Securities who viewed the first-quarter growth rate most pessimistically with a 0.7% contraction, said, "Demand from all regions including China, the United States, and the European Union (EU) slowed down last month," adding, "I believe South Korea is already in a recession."

The first-quarter growth rate is scheduled to be officially announced next week. Bloomberg added that if the figure falls short of market expectations, it would strengthen the view that the Bank of Korea's benchmark interest rate hikes have ended. The Bank of Korea raised the benchmark interest rate by 0.25 percentage points to 3.5% in January and has kept it unchanged through this month.

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