April 20, 2024

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The South Korean economy is expected to bounce back next year, although its expansion may be weaker than expected due to falling exports and weak consumer sentiment.

Asia’s No. 4 economy is expected to grow 2.3 percent on-year in 2020, according to the Korea Institute for Industrial Economics & Trade, slightly improving from this year’s estimated 2 percent growth. 

The KIET, which earlier predicted a 2.4 percent growth for 2019, revised down its outlook for this year on the protracted trade disputes between the United States and China, which led to reduced investment and consumption here.

“The global trade disputes, along with the fiscal policies of major countries, will play decisive roles in the economic growth,” a KIET official said.

The country’s outbound shipments are expected to increase 2.5 percent in 2020 from a year earlier, a sharp turnaround from this year’s estimated fall of 9.8 percent, it added.

The KIET claimed the global business environment for chips, the backbone of Korea’s exports, will improve in 2020. Excluding chips, however, exports will manage to edge up only 0.6 percent on-year, it added.

By Ram Garikipati and newswires (ram@heraldcorp.com)