The Korean economy is sinking into a swamp of slow growth. As the Chinese economy, which was seen as an opportunity to turn around, sank, it is expected that Japan will lose its growth rate for the first time in 25 years. There are concerns that the Korean economy is entering a ‘ Muddling through ‘ situation where it struggles through the mud without finding a solution. The government is sticking to the stance that “it will recover in the second half of the year.”
On the 16th, the won-to-dollar exchange rate in the Seoul foreign exchange market closed at 1336.9 won, up 6.0 won from the previous trading day. The exchange rate opened at 1340.0 won, up 9.1 won from the battlefield, and then rose to 1341.0 won at the beginning of the market, threatening the all-time high (1343.0 won).
In the stock market on this day, the KOSPI closed at 2525.64, down 45.23 points (1.76%) from the previous day. The KOSDAQ index also closed at 878.29, down 23.39 points (2.59%) from the previous day.
It is evaluated that the uncertainty in the financial market on this day was directly affected by signs of a slowdown in China, but also reflected the weakening nature of the Korean economy.
According to Oh Ki-hyeong, a member of the토토사이트 National Assembly’s Political Affairs Committee, the office of a member of the Democratic Party of Korea, South Korea’s gross domestic product ( GDP ) in the first half of the year grew 0.9% year-on-year, less than half of Japan’s 2.0%.
As export sluggishness, which has been on a downward trend this year, shows no room for recovery, it is highly likely that this trend will continue into the second half. If this happens, Korea will overtake Japan in growth rate for the first time in 25 years since 1998, during the Asian financial crisis.
The International Monetary Fund ( IMF ), announcing its revised world economic outlook last month, predicted that this year Korea’s growth would decrease by 0.1 percentage point and Japan would grow by 0.1 percentage point, respectively, by 1.4%. However, as Japan’s second-quarter growth rate announced on the 15th far exceeded market expectations, it is certain that this year’s growth rate will exceed the IMF’s forecast. Japan’s exports surged in the second quarter, up 3.2% from the previous quarter, and more than 10 million tourists visited in the first half of the year, contributing to the expansion of consumption.
On the other hand, Korea is unable to get out of the swamp of sluggishness as the expected effect of China’s reopening (resumption of economic activity) has disappeared. Between the 1st and 10th of this month, exports to China decreased by 25.9% from the same period last year, continuing the decline for the 15th month.
Major investment institutions have lowered their forecasts for China’s growth this year to 4%, as China’s production and consumption figures for July released the previous day fell far below market expectations. JP Morgan Chase, which predicted China’s growth rate for this year at 6.4% in May, lowered it to 4.8% on the 15th
. In the stock market on this day, Shinsegae ( -2.10 %), Hyundai Department Store ( -3.95 %), Hotel Shilla ( -0.66% )%) and distribution-related stocks all ended down.
Signs of a slump in domestic demand are being detected everywhere. According to the Financial Supervisory Service, as of the end of June, the delinquency rate of full-time credit card companies stood at 1.58%, up 0.38 percentage points in a year.
Until the first half of this year, the number of corporate bankruptcy applications filed nationwide was 724, a 60.2% increase from the first half of last year (452). This is the largest ever in the first half of this year, and the entire private economy is already shaking.
The government is sticking to its position that the private economy will revive in the second half of the year. It is said that the effect of tax cut policies targeting large corporations, such as last year’s corporate tax cut, will appear sooner or later. In addition, the recent sluggish exports are characterized by the overlap of the summer vacation period in August, and the trade balance deficit will turn into a surplus from September.
Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho said on the day, “The tax cut effect to stimulate corporate investment will appear with a time lag.” ”he said.
However, experts are concerned about the government’s complacency in recognizing the situation. In terms of policy, the government should play a more active role. I saw that it could play a variety of roles as an agent in overcoming the economic crisis, even if it was not necessarily financial input.
Ha Joon-kyung, a professor of economics at Hanyang University, said, “China’s reeling is not simply a matter of the economy itself, but a matter of changing economic structure.” do,” he said.