* While we remain relatively constructive on South Korea's economic growth in 2014, as we expect real GDP growth to accelerate to 3.0% from 2.8% in 2013, our forecasts are fairly below consensus. We highlight growing risks from Corporate Korea as an increasing number of chaebols, particularly within the construction sector, are succumbing to the prolonged slump in the domestic real estate sector. Additionally, a slowdown in China's economy, and the ensuing drag on the Korean economy, is very much on the cards
* While the prescribed targets laid out in South Korea president Park Geun-hye's economic reform plan may appear overly ambitious, the proposed drive towards deregulation and support of the services sector, if realised, will provide the Korean economy with new pillars of economic growth and set the country on a more sustainable path of economic expansion. Also, the planned pullback the public sector's involvement in the economy will aid not just in growth of the private sector, but also help to improve the government's fiscal profile.
* We are not particularly sanguine towards the Korean won's performance in 2014. We are forecasting the unit to average KRW1,120/US$ through 2014 before ending the year at KRW1,150/US$. Not only do we envision a weaker macro outlook in the coming year, but we also believe the strength in the currency is likely to reverse course as the relative attractiveness of other regional currencies that took a beating in the previous months start to gain traction once again.
* South Korean president Park Geun-hye's push to increase the country's global free-trade agreement share is largely a positive for the country. An expansion in trade volumes and increased investment will provide strong support for Korean exporters, even as Seoul attempts to carve out a more consumption-driven economy. We believe that tighter economic relations between Northeast Asian countries would also help foster a more stable political environment.
Full Report Details at
- http://www.fastmr.com/prod/924071_south_korea_business_forecast_report_q1_2015.aspx?afid=301
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The South Korea Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in South Korea and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of South Korea's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).
Key Uses
* Forecast the pace and stability of South Korea's economic and industry growth through end-2018.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
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