Headwinds Mounting For 2008

BMI View: We now see downside risks for our 2008 growth forecast of 5.1% as South Korea's important export sector faces growing headwinds and domestic sentiment is starting to falter. The entry into office of new president Lee Myung-bak is likely to boost business sentiment, but South Korean firms could opt to postpone investment until external conditions have stabilised. Meanwhile the central bank will be struggling to maintain inflation within its 2.5-3.5% comfort zone without exacerbating a potential economic downturn through implementing further rate hikes.

To read the full article, please choose one of the following options: