Macroeconomic Forecast South Korea

July 2008 | Macroeconomic Forecasts

BMI View: We have revised down our GDP growth forecast for 2008 from 4.7% to 4.2% as domestic demand continues to drag. A prolonged weakness in private consumption and corporate investment will weigh on overall growth this year, and will only be partially offset by the KRW7.1trn (US$7bn) fiscal stimulus package presented on June 8. We are more optimistic about external demand as export diversification has lowered South Korea's exposure to the US, meaning that the export sector should benefit from continued strong growth in China and other emerging markets. We have also revised down our GDP forecast for 2009 from 4.9% to 4.3% as a weak housing market and tight monetary conditions inhibit consumption.

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