(MENAFNEditorial)
Core Views
* The landslide victory in the April 29 by-elections shows that South Korea's ruling Saenuri party retains considerable support despite corruption allegations against senior party members. The victory will support President Park Geun-hye's ongoing efforts to improve the economy by enabling the passage of revitalisation bills through parliament.
* South Korea's Q115 real GDP grew by 2.4% year-on-year (y-o-y) reflecting the economy's second slowest growth rate in nine quarters. With the country facing dual headwinds in the form of weak external demand and anaemic domestic conditions we maintain our forecast for 2015 real GDP growth to come in at 2.8% below consensus expectations of 3.2%.
* President Park Geun-hye's proposed drive to shift the economy away from manufacturing towards one led by innovation if realised will provide the Korean economy with new drivers of economic growth and set the country on a more sustainable path of economic expansion.
* In line with our expectations the Bank of Korea (BoK) held its base rate at 1.75% during its monetary policy meeting on May 15. We continue to forecast interest rates to remain on hold throughout 2015 as the BoK focuses on supporting economic growth amid both internal and external headwinds. However with inflation remaining well below the BoK's target range and exports struggling we note that risks to this forecast are weighted to the downside.
* We have a bearish bias towards the Korean won in the near term as external factors such as a sharply depreciating Japanese yen have a negative impact. However positive real interest rate differentials versus the US a strong current account surplus and large reserve build-up suggest the currency will be well supported.
Full Report Details at
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Key Risks To Outlook
* Downside Risks To Economic Growth Forecast: Should we see a sharper-than-expected downturn in the global economy or even an implosion in South Korea's household debt market we would certainly expect to see a...
The South Korea Country Risk Report helps businesses with market assessment strategic planning and decision making to promote growth and profitability in South Korea. It is an essential tool for CEOs Chairmen Finance Directors/CFOs Managing Directors Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of South Korea's economic political and financial prospects through end-2019 just published by award-winning forecasters BMI Research.
Key Uses
* Forecast the pace and stability of South Korea's economic and industry growth through end-2019.
* Identify and evaluate adverse political and economic trends to facilitate risk mitigation.
* Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
* Contextualise South Korea's country risks against regional peers using BMI's country comparative Risk Index system.
* Evaluate external threats to doing business in South Korea including currency volatility the commodity price boom and protectionist policies.
The South Korea Country Risk Report by BMI Research includes four major sections:Economic OutlookPolitical OutlookOperational RiskandKey Sector Outlook.
Economic Outlook:
How will the South Korea' economic policy-making and performance impact on corporate profitability over 2015-2019?
BMI provides our fully independent 5-year forecasts for South Korea through end-2019 for more than 50 economic and key industry indicators. We evaluate growth and also forecast the impact of economic management.
Economic Outlook Contents
The South Korea Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019 set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
Data:
* Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita) population inflation current account balance and the exchange rate.
* BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk and rates the business environment within a global and regional context.
Written Analysis:
* Economic Activity - real GDP growth employment inflation consumption (retail sales and confidence).
* Balance of Payments - trade and investment current and capital account.
* Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
* Exchange Rate Policy - currency controls foreign investment flows exchange rates and foreign exchange reserves.
* Fiscal Policy - macroeconomic strategy and policies government finance and tax reforms.
* Foreign Direct Investment - approvals inflows and climate.
* External Debt - debt profile (short and long-term plus public and private sector obligations).
* Global Assumptions - forecasts for each year to end-2019 covering: major commodities growth in key regions inflation and interest and exchange rates in the United States Japan China and the eurozone.
Key Benefits
* Rely upon BMI's 100% independent forecast scenarios for South Korea and underlying assumptions - we take no advertising and are privately-owned.
* Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on South Korea sourced and fully maintained by BMI from an extensive network of private sector government and multilateral contacts.
* Gain key insights into the current and future direction of government economic policy which could significantly affect your company's business prospects from BMI's team of analysts and economists.
Political Outlook:
What are the political risks to doing business in South Korea over the next 5-years?
BMI's South Korea country Risk Index evaluates the short- and medium-term threats to political stability.
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