South Korea

RGE's Q3 2010 South Korea Outlook

Despite waning fiscal spending, South Korea’s growth accelerated in H1 2010 as private consumption strengthened and investment and exports rose significantly. However, growth will slow to 5% in H2 2010 and weaken further in H1 2011 as slowdowns in exports and inventory restocking at home and abroad weaken investment and the fragile labor market and consumption recoveries. RGE expects South Korea to grow 6.1% in 2010 before skidding to a rate of 3.9% in 2011. An expected slowdown in China looms over the export outlook, and global risk aversion could shake asset markets and external accounts. Amid an aging population, high debt burden and weakened exports, South Korea’s trend growth will slow to around 3-3.5% in the coming years compared to 4-5% in 2004-07.

Read the Q3 2010 South Korea Outlook