Inflation expectations inch down for March despite worries over utility bills

South Korea's inflation expectations inched down for March despite worries over rising public utility bills, a central bank survey showed Wednesday. Ordinary people expected consumer prices to rise 3.9 percent for the year ahead, down 0.1 percentage point from what was surveyed a month earlier, according to the poll conducted by the Bank of Korea. It followed two straight months of a rise. "While price increases in processed food, dining out and transportation remain high, oil prices h

March 29, 2023

2024 budget to boost defense, welfare spending

South Korea will continue to tighten its belt by reducing more than 10 percent of its discretionary expenditure while planning to funnel the budget into boosting national security and creating jobs for young people. Next year's budget plan is expected to remain at around 670 trillion won ($515.9 billion), up about 4.8 percent from this year's 638.7 trillion won, which was proposed as a mid- to long-term plan by the government. The budget will be earmarked for enhancing economic vital

March 28, 2023

The global banking crisis and world economy

By Jeffrey D. Sachs The banking crisis that hit Silicon Valley Bank at the beginning of March has now spread rapidly and widely. We recall with a shudder two recent financial contagions: the 1997 Asian Financial Crisis, which led to a deep Asian recession, and the 2008 Great Recession, which led to a global downturn. The new banking crisis hits a world economy already disrupted by the pandemic, the Ukraine War, Western sanctions on Russia, US-China tensions, and climate shocks. At the root of

March 28, 2023

Korea mulls measures to spur spending amid inflation woes

The government is expected to unveil its scheme to invigorate domestic spending and tourism this week, amid stagnant exports struggles, to shore up the economy. The Ministry of Economy and Finance and Ministry of Culture, Sports and Tourism are drawing up measures chiefly aimed at reviving the local tourism industry, which remains depressed in the aftermath of the COVID-19 pandemic. Authorities are looking at ways to launch a coupon program that provides a certain discount when booking hotel

March 27, 2023

Local banks show no signs of withdrawal problems: regulator

South Korea's financial regulator said Monday that local banks showed no signs of abnormality in their withdrawal and deposit operations. The assessment by the Financial Supervisory Service came amid concerns of a global banking crisis following the recent failures of two US banks -- Silicon Valley Bank and Signature Bank -- and the stock plunge of Deutsche Bank, Germany's largest bank. Only a small number of customers with deposits exceeding 50 million won ($38,400), the maximum amoun

March 27, 2023

Improved ties with Japan to boost exports, consumption: finance minister

South Korea and Japan's latest efforts to restore bilateral ties will give a "significant positive spillover" to Asia's No. 4 economy, the finance minister said Friday. On Thursday, South Korea completed procedures to drop a complaint it filed with the World Trade Organization against Japan over Tokyo's trade curbs as it began domestic procedures to put Japan back on its "white list" of trusted trade partners. The move came after President Yoon Suk Yeol held su

March 24, 2023

US Fed’s quarter-point rate rise eases pressure on South Korea

The US Federal Reserve lifted its base rate by 25 basis points on Thursday, easing pressure for the Bank of Korea, which had been concerned about key rate differences between the two countries. The Federal Open Market Committee went for a quarter-point move, raising the target interest rate from 4.5-4.75 percent to 4.75-5 percent. The quarter-point raise fell in line with the market expectation which projected the Fed will not go for a 50 basis point hike following the recent turmoil in the bank

March 23, 2023

S. Korea to raise guard against market instability after Fed rate hike

South Korea's chief economic policymaker warned Thursday of the possibility of further instability in the global financial market, such as a recent bank turmoil sparked by the failure of American lenders, amid the continued monetary tightening moves by the United States and major economies. Finance Minister Choo Kyung-ho made the assessment during an emergency meeting on the macroeconomic situation, which was also attended by Bank of Korea Gov. Rhee Chang-yong and other officials. On Wednes

March 23, 2023

Korea, Japan to expedite trade talks after summit

South Korea and Japan are accelerating their efforts to break down bilateral trade barriers induced by a historical row and to push for revival of economic cooperation. As early as this week, Japan will wrap up procedures to lift restrictions on exports of key semiconductor materials to Korea, while Korea will withdraw its complaint filed with the World Trade Organization against the export curbs, Minister of Trade, Industry and Energy Lee Chang-yang said during a press briefing Wednesday. W

March 22, 2023

Finance ministers of Korea, Japan may meet after 7 years

Top financial policymakers of Korea and Japan may hold a one-on-one meeting for the first time in seven years, following the recent easing of tensions between South Korea and Japan. The Finance Ministry is looking into launching talks between its minister Choo Kyung-ho and his Japanese counterpart Shunichi Suzuki, following President Yoon Suk Yeol’s state visit to Japan. With the Korean government announcing that a Seoul-backed foundation would compensate victims of wartime forced labor ea

March 21, 2023

OECD slashes S. Korea's 2023 growth outlook to 1.6 percent

The Organization for Economic Cooperation and Development (OECD) on Friday revised down South Korea's growth outlook for 2023 to 1.6 percent, as the global economy continues to stand on "fragile" grounds amid uncertainties. The latest outlook, released through the Paris-based organization's interim report, marked a 0.2 percentage-point drop from a 1.8 percent growth projection in November. The downward revision is in line with the Bank of Korea's assessment released

March 17, 2023

Tokyo lifts export curbs; Seoul withdraws WTO complaint

South Korea and Japan's easing of trade tensions has spurred hope among Korean businesses, as the two agreed to bolster economic ties on the sidelines of the summit talks held in Tokyo on Thursday. Earlier in the day, Japan announced it would lift restrictions on exports of key semiconductor materials to Korea, while Korea in return decided to withdraw its complaint filed with the World Trade Organization against the export curbs. Both countries also plan to continue talks to reinstate each

March 16, 2023

Number of marriages in Korea hits new low

Amid changing social norms, more Koreans tie the knot at an older age The number of marriages in Korea dropped to an all-time low in 2022, government data showed on Thursday. According to a report shared by Statistics Korea, the number of Koreans getting married came to a record low of 192,000 last year, down 0.4 percent on-year. It marked the lowest reading since 1970, when the government statistics agency first began compiling the data, and is the 11th straight year the figure has decreased. T

March 16, 2023

[KH Explains] SVB collapse eases pressure on BOK

  The abrupt fallout from the Silicon Valley Bank collapse has led to raised bets that the US Federal Reserve will be less aggressive in raising interest rates, lifting the burden on the Bank of Korea, which was under pressure from the widening key rate gap. Prior to the banking crisis that hit the financial market on Friday, the market had been expecting the Fed to raise the base rate by 50 basis points this month. Fed chair Jerome Powell had been giving hawkish guidance in past weeks, war

March 15, 2023

Job additions smallest in 2 years in Febuary amid economic slowdown

South Korea's monthly job additions slowed for the ninth consecutive month in February, data showed Wednesday, amid forecasts the job recovery will lose steam this year amid the economic slowdown. The number of employed people came to 27.71 million in February, up around 312,000 from a year earlier, according to the data compiled by Statistics Korea. Excluding those aged 60 and above, however, the figure moved down 101,000 over the period. The February figure marked a decrease from 411,000

March 15, 2023

Finance Minister says Korea will keep close eye on SVB collapse

Finance Minister Choo Kyung-ho said the government will closely monitor the collapse of Silicon Valley Bank, which has been sending shock waves across the world for the past few days, amid efforts to calm the local financial market. SVB, a major US bank largely focused on startup loans, went bankrupt on Friday. Signature Bank, one of the main banks in the cryptocurrency industry, also closed following concerns of a spreading banking crisis. Choo said that the SVB crisis stemmed from financial in

March 14, 2023

Fitch keeps S. Korea's credit rating unchanged at 'AA-,' outlook stable

Global credit appraiser Fitch Ratings said Monday it has reaffirmed South Korea's sovereign rating at "AA-" with a stable outlook, while suggesting an economic growth of 1.2 percent this year. Fitch's rating for South Korea has been AA-, the fourth-highest level on the agency's table, since September 2012. "Korea's rating balances robust external finances, resilient macroeconomic performance and a dynamic export sector against geopolitical risks related to Nort

March 13, 2023

How will SVB collapse affect Korea?

  President Yoon Suk Yeol said Monday that uncertainty in the financial market is growing due to the bankruptcy of Silicon Valley Bank, one of the largest banks in the United States. “The cause of the SVB collapse, the progress of the situation, the US authorities’ response, as well as their impact on the domestic financial market and the real economy should be closely examined by the deputy prime minister of economy and others,” he said at a meeting with senior secretarie

March 13, 2023

BOK closely monitoring impact of SVB collapse on financial markets, economy

The Bank of Korea said Monday that it will closely monitor any impact of last week's collapse of a US tech startup-focused lender on domestic financial market and economic conditions, though it dismissed worries that the issue could turn into a systemic risk. On Friday, US banking regulators shut down Silicon Valley Bank and took control of its customer deposits in the largest failure of a US bank since the 2008 financial crisis. It was followed by the collapse of another US bank, Signature

March 13, 2023

Exports down 16% during first 10 days of March

South Korea's exports fell 16.2 percent on-year in the first 10 days of March, data showed Monday, due to sluggish shipments of chips. The country's outbound shipments stood at $15.8 billion in the March 1-10 period, compared with $18.8 billion a year earlier, according to the data from the Korea Customs Service. Imports advanced 2.7 percent on-year to $20.8 billion during the cited period, resulting in a trade deficit of $4.9 billion. In February, the country's outbound shipments

March 13, 2023