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1 month ago
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Source: AFP
South Korea's economy unexpectedly contracted 0.1 percent successful the archetypal 3 months of this year, the country's cardinal slope said Thursday, arsenic the Asian export elephantine reels from months of governmental chaos and heightened commercialized tensions.
US President Donald Trump's threatened 25 percent "reciprocal" tariffs connected export-dependent South Korea person rattled Asia's fourth-largest economy, sending Seoul-listed shares tumbling and pushing the currency to its weakest level since 2009.
The state is besides inactive emerging from a governmental situation triggered by erstwhile president Yoon Suk Yeol's December effort to suspend civilian rule, which culminated successful his impeachment and removal from bureau this month.
Source: AFP
"Real gross home merchandise (GDP) fell by 0.1 percent compared to the aforesaid play past year," the cardinal slope said, adding that it contracted by 0.2 percent from the erstwhile quarter.
"Two developments deed assurance and the system -- fallout from erstwhile President Yoon Suk Yeol's failed martial instrumentality effort and worries astir shifts successful US commercialized policies," said Hyosung Kwon, an economist astatine Bloomberg Economics.
"Looking ahead, we spot the system rebounding successful the 2nd 4th of this year, helped by easing governmental uncertainty astatine home. But the betterment volition apt stay fragile arsenic elevated US tariffs measurement connected outer demand," Kwon added.
Dented exports
The country's system expanded 1.3 precent successful the archetypal 4th of past twelvemonth but grew little than expected successful the 4th quarter, arsenic the fallout from Yoon's declaration of martial instrumentality deed user assurance and home demand.
According to the Korea Customs Service, arsenic of mid-April, the country's exports had dropped by much than 5 percent compared to the erstwhile year, with declines reported successful 9 retired of the country's 10 large export categories excluding semiconductors.
Source: AFP
The sharpest autumn was successful exports to the United States, which plunged by much than 14 percent.
The International Monetary Fund this week sharply revised down its maturation forecast for South Korea for the year, cutting it from 2.0 percent to 1.0 percent.
"The South Korean system is facing structural burdens of precocious ostentation and a anemic won-dollar speech rate, and nether this dual pressure, a slowdown successful maturation is becoming progressively evident," Kim Dae-jong, a prof astatine Sejong University, told AFP.
Bank of Korea politician Rhee Chang-yong said past week the country's yearly maturation complaint is present "expected to autumn abbreviated of the 1.5 percent forecast made successful February".
"The tightening of tariff policies, which is overmuch stronger than initially projected, volition apt further measurement connected maturation prospects," helium told reporters successful a property conference.
He added that "political uncertainty has dragged connected longer than expected, delaying the betterment of economical sentiment."
Sluggish home demand, on with factors specified arsenic large-scale wildfires which tore done swaths of the country's southeast successful precocious March, had besides contributed to the downturn, Rhee said.
Addressing parliament, acting president Han Duck-soo underlined "significant" challenges by South Korea.
"Unprecedented US-driven tariff policies person created a level of uncertainty that is causing accelerated and unpredictable shifts successful the planetary economical landscape," Han told the National Assembly.
US tariffs connected alloy and automobiles, arsenic good arsenic broader levies imposed by Trump connected different goods, are expected to "place sizeable strain connected Korean industries and businesses," added Han.
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Source: AFP
