South Korea’s economy shows signs of slowdown due to sluggish exports

According to the Korea Development Institute (KDI), the South Korean economy is showing signs of slowing down as the manufacturing sector struggles with sluggish exports. The KDI said in its monthly report that while investment continued to increase in November, exports slumped due to sluggish external demand, suggesting a decline in economic activity.

The KDI report shows that automobile production in the manufacturing sector has recovered, but overall manufacturing is weak. This is due to a sharp slowdown in the production of most goods and the gradual decline in growth in the service sector.

In addition, part of the impact is due to increasing uncertainty in the financial markets. Negative pressures are expected to intensify as the effects of domestic and foreign interest rate hikes begin to impact the real economy.

The Bank of Korea (BOK) has raised its key interest rate by a total of 2.75% since August. As a result, the key interest rate in South Korea currently stands at 3.25%, with the BOK trying to keep inflation under control. South Korea’s Ministry of Finance estimates that South Korea’s exports will fall by 4.5% in 2023 as the global economy slows and chip demand softens.

Leave a Reply

Change Language
%d bloggers like this: