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South Korea’s economy shows signs of slowdown as exports weaken

According to the Korean Development Institute (KDI), there are increasing signs of a slowdown in the South Korean economy. This is said to be due to weak exports and sluggish production as a result of risk factors in international markets.

The KDI’s latest economic outlook was worse than the October estimate, which said the South Korean economy was recovering slightly despite the risk of a downward trend.

South Korean government data shows that South Korean exports fell 5.7% year-on-year in October. This was the first decline in 2 years.

In October, semiconductor exports fell 17.4% year-on-year as chip demand and prices declined, with semiconductor exports falling for the third month in a row.

According to the South Korean central bank (BOK), South Korea’s gross domestic product (GDP) grew 0.3% in the third quarter, slower than in the second quarter (0.7%) and the slowest since the third quarter of 2021, due to the impact of sluggish exports and a sharp rise in inflation.

The BOK is pursuing a tight monetary policy by raising interest rates, like central banks around the world, to alleviate rising inflationary pressures. Recently, at the October 12 meeting, the BOK raised the policy rate by 0.50% to 3.00%, the first time in about 10 years that interest rates reached 3.00%.

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