South Korean Economy Facing Recession?
Fresh concerns over a global recession are setting off alarm bells in the South Korean economy, which is heavily dependent on overseas demand and feared to miss its growth target this year, market experts said Friday.
A report by Morgan Stanley on Thursday warned that global growth was slowing and that the U.S. and Europe were on the brink of plunging into a new recession, two years after the end of the last one.
The global investment bank noted that weekly and monthly economic data released in the U.S. show no improvements in the job market, sinking housing sales and rising inflation. The U.S. economy expanded at less than a 1 percent annual rate in the first half of the year.
The eurozone economy is also losing its growth momentum. The German economy, the locomotive of the European Union (EU) economy, expanded 0.1 percent in the second quarter from the previous quarter, slowing from its 1.3-percent on-quarter gain.
According to data from the commerce ministry, South Korea’s trade with the EU and the U.S. accounts for 20 percent of its total exports and imports, which means an economic slowdown in the two economies would hurt the South Korean economy.
“The South Korean economy is facing growing uncertainties, and its growth rate will fall as the global economy is losing steam for growth,” said Chung Young-shik, a researcher at the Samsung Economic Research Institute.
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