Macroeconomic Forecast South Korea

We have revised down our 2009 GDP forecast for South Korea from -0.5% to -3.3% on the back of a sharper-than-expected drop in exports and a continued contraction in private consumption. While a weaker currency and fiscal and monetary stimulus should serve to dampen the slowdown, the gains of export diversification now appear limited as few markets will escape unscathed in 2009. With the anticipated downturn now expected to last well into 2010, we expect South Korea to post a relatively meager 3.0% GDP expansion next year

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