November 12, 2024 04:09 GMT
SOUTH KOREA: State Run Think Tank Slashes Export Outlook for Korea.
SOUTH KOREA
- The Korea Development Institute (“KDI”) lowered its export growth outlook for 2025 to +2.1%.(as per article in Yonhap). (NB: A BBG survey of 39 participants forecasts exports growth of 3.3% in 2025)
- Down from the +7.0% full year projection for 2024, KDI noted that there were upside risks to a shift in US trade policy, leading to contraction in global trade.
- KDI also reduced their forecast for 2025 for inflation from 2.3% in 2024 to 1.6% (NB: A BG survey of 39 participants forecasts CPI of 2.0% in 2025).
- KDI forecasts that overall, 2024 GDP growth will be lower than forecast at 2.2% whilst for 2025 they project a 2.0% expansion.
- The IMF forecasts the Korean economy to expand +2.2% for 2025.
- Following an extended period at the highest rate in many years, the Bank of Korea cut rates in October to 3.25%.
- Whilst some observers forecast this to be the start of a constant rate cutting cycle, markets have not fully priced in a cut yet for the next meeting on November 28.
- Bond markets have been strong in Korea today with yields lower across the curve, the outperformer being the 5-year lower by 2bp on the day.
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