Asia Minute: South Korea’s Economy Faces Uncertainty
As you heard earlier on NPR, South Korea has a new president this morning. Moon Jae-in took office immediately following his election victory. And while much attention is focused on relations with North Korea, Moon will also be dealing with another important story: South Korea’s economy. HPR’s Bill Dorman has more in today’s Asia Minute.
South Korea’s economy is the fourth largest in Asia trailing only China, Japan and India.
But the next presidential administration is a crucial period.
The main engine of economic growth over the past several decades has been the sprawling corporate conglomerates known as the chaebol—including some familiar international names: Samsung, Hyundai, L.G.
Their business interests have overlapped with politics and the corruption trial of former president Park Geun-Hye may produce further headlines.
More possible corporate fallout is one factor the International Monetary Fund cited on Tuesday when it kept its growth projection for South Korea unchanged at 2.7 percent for this year.
Household debt remains high.
Unemployment among young people: above 11-percent.
But there are also positive indicators—and expectations.
The Consumer Sentiment Index has been rising in recent months.
The Kospi stock index has set several new highs—as recently as Monday.
Korea depends on trade—and exports have risen for six months in a row.
One question mark is the future of the U.S.-Korea Free Trade Agreement—criticized by President Trump. Another is possible reform of the deeply-entrenched chaebol system.
But in the short term, Moon Jae-in’s new administration represents a chance for relative stability.