[Economy in Pandemic 4] Impact of plunging oil prices on Korean markets

The plunging crude oil prices may increase pressure on South Korea’s financial market with rising volatility forcing investors to secure cash, not to mention its negative impact on the economy. The sharp drop in oil prices in recent weeks has rattled the stock market, already reeling from the deepening coronavirus pandemic. Oil refining and chemical industries are bearing the brunt, not only from plummeting demand but also lackluster investor sentiment.  According to data of the

March 24, 2020

Govt. stresses role of fiscal spending for growth in 2021

South Korea on Tuesday highlighted the importance of its budget spending in supporting the country's economic growth next year, signaling a budget hike amid the growing fallout from the spread of the new coronavirus. Under its 2021 budget guidelines, the government said it will continue to maintain the active role of fiscal spending in boosting growth, while seeking to enhance its fiscal soundness. The guidelines, reviewed and approved by the Cabinet on Tuesday, are designed to direct governme

March 24, 2020

Uncertainty growing over S. Korean exports despite recent upturn

Despite a recent recovery, uncertainty is growing over South Korea's exports down the road due to the economic impact of the coronavirus pandemic, sources said Tuesday. The country's outbound shipments grew 10 percent on-year in the first 20 days of March on brisk overseas demand for chips and automobiles, along with more working days, according to government data. The solid increase follows a 4.5 percent rise in February, the first rebound in 15 months. This month's improved export performan

March 24, 2020

S. Korea keeps keen watch on New York, London markets

South Korea on Monday said it was carefully monitoring the financial market situations in New York and London, lest the global spread of COVID-19 lead to system breakdown in major economies and spill over to the global financial market. It also vowed to immediately initiate an exclusive task force to keep round-the-clock tabs on the macroeconomic financial situation here, further tightening guard against the snowballing fallout.　 “The global real economy will contract more dramatically

March 23, 2020

Seoul, Moscow hold FTA talks for service sector

South Korea on Monday launched another round of trade talks with Russia to flesh out details on the two country's pending free trade agreement (FTA) in the service and investment segments. The two countries have decided to hold the four-day video conference on their free trade talks due to the global spread of the novel coronavirus, according to the Ministry of Trade, Industry and Energy. So far, the two countries held three rounds of trade negotiations, with the previous meeting being held in

March 23, 2020

Virus outbreak may lead to Korea's first negative growth since 1998: reports

South Korea's economy may post its first negative growth in more than two decades this year should the spread of the new coronavirus continue to undermine global economy and trade, reports suggested Monday. Capital Economics, a London-based economic research consultancy, said in a report last week that the South Korean economy could shrink 1 percent this year, the worst outlook for Asia's fourth-largest economy so far. South Korea also said its economic growth will likely slow due to the globa

March 23, 2020

Korea's exports up 10% in first 20 days of March amid virus woes

South Korea's exports moved up 10 percent in the first 20 days of March from a year earlier despite the new coronavirus pandemic, customs data showed Monday, led mostly by improved shipments of chips and automobiles, along with increased working days. The country's outbound shipments came to $30.7 billion in the March 1-20 period, rising from $27.9 billion in the same period a year earlier, according to the data from the Korea Customs Service. The daily average for the period, however, slipped

March 23, 2020

S. Korea likely to provide 2nd extra budget in May amid coronavirus crisis

Speculation is growing here that South Korea will compile an additional supplementary budget after the April general elections to deal with the extended economic fallout from the COVID-19 pandemic. Last Tuesday, the National Assembly approved an extra budget bill worth 11.7 trillion won ($9.4 billion), the country’s largest ever, in response to the coronavirus crisis. While the total amount of the budget remained unchanged from the government’s initial suggestion, some planned

March 22, 2020

Hyundai Mobis develops sensing system to prevent hot car deaths

Hyundai Mobis Co., South Korea's biggest auto parts maker, said Sunday it has developed a radar-based in-cabin sensing system meant to prevent hot car deaths. The radar-based rear occupant alert (ROA) system alerts a driver to check the vehicle's back seat in case the presence of a child is detected. Hyundai Mobis said it had "preemptively" developed the ROA system as carmakers should adopt such an in-cabin safety alert in their vehicles in Europe from 2022. "The radar-based R

March 22, 2020

Additional financial measures to come next week to revive virus-battered economy

The South Korean government will unveil an additional package of financial measures in detail next week to placate staggering financial markets roiled by the spread of the novel coronavirus. According to financial authorities, the upcoming announcement will include follow-up measures related to the massive 50 trillion-won ($39.8 billion) financial support program that was already introduced Thursday. The aid package, which aimed at supporting small and medium-sized firms and people with low

March 21, 2020

‘Financial authorities need flexibility to help virus-hit economy’

A top financial regulatory body urged authorities Friday not to panic and keep funds flowing during the coronavirus pandemic. The Financial Stability Board, which coordinates the work of national authorities around the world, said in a recent statement that the global financial system is in a better position to cope with the severe market shock from COVID-19, than it was for the global financial crisis in 2008. However, it called on authorities to take action to support market functions by ens

March 21, 2020

ADB postpones meeting in S. Korea amid coronavirus fears

The Asian Development Bank’s upcoming annual meeting, originally slated to be held here in May, will be postponed to September in light of the coronavirus spread, according to ADB and the South Korean government. “As COVID-19 continues to spread around the globe, (ADB and Korea) have agreed to postpone the 53rd ADB Annual Meeting of the Board of Governors from the originally planned May 2-5 to Sept. 18-21,” the Ministry of Economy and Finance said in a release. “We p

March 20, 2020

S. Korea to import 53 tons of mask filters amid supply shortage

South Korea said Friday it plans to import 53 tons of mask filters through June to keep up the supply of the sanitary item amid the spread of the new coronavirus. The first batch of 2.5 tons of melt-blown nonwoven fabric filters will arrive here next week, according to the Ministry of Trade, Industry and Energy. The country has been running short of protective masks, as well as their materials, as demand for them has soared amid the COVID-19 epidemic. Starting last week, South Korea has been

March 20, 2020

Pension fund to naysay appointment of some board members at banks, conglomerates

South Korea's state pension fund will vote against the appointments of some board members at banks and major companies during shareholder meetings as they are not qualified for the positions. The National Pension Service (NPS) said its trust management committee has decided to object to the appointments of Woori Financial Group Chairman Sohn Tae-seung and Shinhan Financial Group chief Cho Yong-byoung as board members at the banks. The pension service also said it will vote against the motion t

March 20, 2020

S. Korea, US sign a $60b currency swap deal

The Bank of Korea and the US Federal Reserve Board on Thursday signed bilateral currency swap arrangements totaling at $60 billion, to be effective for the next six months, South Korea's central bank said. "The latest (US-Korea) currency swap deal seeks to reduce the strain upon the recently struggling global dollar currency market," the BOK said in a late night release. The US Fed conventionally had permanent currency swap deals with five other central banks -- Canada, B

March 19, 2020

BOK to purchase 1.5tr won in bonds as market stabilization step

The Bank of Korea on Thursday said it will purchase 1.5 trillion won ($1.16 billion) in state bonds to help stabilize the local market hit hard by growing jitters caused by the spread of the new coronavirus. "The Bank of Korea decided to purchase state bonds to help stabilize the bond market and expand its holdings subject to repurchase agreements," the central bank said in a press release. The announcement came shortly after local authorities said they are ready to step in if neces

March 19, 2020

S. Korea to extend antidumping duty on Japanese steel plates

South Korea's trade watchdog said Thursday it will extend its existing antidumping duty on Japanese stainless steel plates, citing substantial damage to the local industry. The Korea Trade Commission said Seoul will continue to apply the 13.17 percent antidumping tariff on the Japanese products for the next five years. South Korea has been imposing the tariff on the Japanese plates since April 2011. The plates are widely used in different industries including the petrochemical, shipbuilding an

March 19, 2020

S. Korea's exports of masks up 2,200% in Feb. amid coronavirus spread

  South Korea's exports of protective masks surged nearly 23 times in February from a year earlier amid the global outbreak of the new coronavirus, data showed Thursday, although the volume is likely to plummet this month in line with the export ban. Outbound shipments of textile articles, which include masks, came to $157 million in February, up from $6.85 million a year earlier, according to the data compiled by the Korea International Trade Association. It also more than doubled from $7

March 19, 2020

S. Korea ready to step in to ease credit crunch

 South Korea said Thursday it will take steps to counter a potential credit crunch in the capital market amid growing market jitters caused by the outbreak of the new coronavirus. "The government will swiftly take market stabilization steps under its contingency plans if needed, so businesses will not face difficulties in securing necessary funds," Vice Finance Minister Kim Yong-beom said after a meeting in Seoul to review the country's financial condition. The official said the

March 19, 2020

[Economy in Pandemic 2] South Korea likely to undergo temporary recession

The Korea Herald is publishing a series of interviews and analyses on the looming threat to the domestic economy from COVID-19. This is the second installment. -- Ed. The impact of the fast-spreading novel coronavirus on the global economy is far harder than projected, greater than the previous pandemics in the modern era. The latest virus outbreak is likely to trigger an economic recession globally -- more so in South Korea, which is heavily dependent on exports for its growth. Market watche

March 18, 2020