73% of Economic Experts Predict Long-Term 1-2% Low Growth for Han Economy

Asked About Main Cause of Difficult Economic Situation
Half of Respondents Cite Global Economic and Political Risks

A survey revealed that a significant number of experts expect South Korea's economy to continue its long-term low-growth trend. The main reasons cited for the economic difficulties were global economic and political risks such as wars.

The Korea Employers Federation announced the results of a survey conducted on June 12, targeting 211 domestic economics and business professors (based on respondents). In this survey, 73.2% of respondents answered that the economy would continue a long-term low-growth trend of 1-2%. Those who expected growth to enter the 2% range next year and average around 3% from 2025 accounted for 14.4%. About 11.0% responded that the economy would temporarily recover to around 3% but then fall back to the 1-2% range. Only 1.4% expected a rapid recovery and growth at the 3% level starting next year.

Our Economic Growth Outlook [Data Provided by: Korea Employers Federation]

Regarding the main causes of the recent difficult economic situation, 50.5% of respondents cited "global economic and political risks such as the Israel-Palestine and Russia-Ukraine wars, US-China hegemonic rivalry, and high inflation." Next, 23.8% pointed to the policy authorities' lack of swift crisis response, and 19.4% mentioned outdated laws and regulations, including excessive regulations.

As for the timing when the won-dollar exchange rate would stabilize at a level similar to the past, between 1050 and 1250 won, 32.7% expected the second half of 2024. Professors who forecasted stabilization in 2025 accounted for 30.8%. A high 26.0% responded that the exchange rate would not stabilize and that the fluctuation range itself would rise.

Regarding the Bank of Korea's base interest rate decision, 61.1% of respondents said the current level should be maintained, considering the uncertain economic situation. As for when the inflation rate would reach the target level of 2%, 37.0% expected it to be in 2025.

To enhance South Korea's competitiveness externally, 66.1% favored lowering the corporate tax rate, which is currently at a top rate of 24% (central government standard). Meanwhile, 29.7% said it should be lowered in the mid-to-long term but maintained at the current level for the time being. About 18.2% believed it should be raised from the current level.

Regarding the recently controversial windfall tax, 57.8% answered that it should not be imposed as it does not align with market principles. Regarding inheritance tax, 70.6% most frequently responded that the top rate should be lowered or abolished and converted into a capital gains tax.

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