Macro Forum: The Street View


GDP continued to rise in the third quarter, showing a performance of 3.1% year-on-year, the fastest expansion in five quarters. Looking at 2018 overall however, GDP growth was down, slowing to 2.7% growth, compared to 3.1% previous year.

The ongoing dispute between South Korea’s largest trading partners, USA and China as well as the economic problems currently being faced by China are likely to have a drag on continuing economic growth in South Korea. Exports have fallen 14.6% year-on-year in the early days of 2019. South Korea’s exports to China which make up a quarter of all the country’s overseas shipments fell 14% year-on-year in December.

Inflationary growth has slowed to 1.3% year-on-year, the weakest rate of growth for five months and below the central bank target of 2%. Prices remain subdued due to weak domestic demand caused by concerns over economic growth and unemployment. In the third quarter, the jobless rate rose to 4%, the worst level since 2001.

The benchmark seven day repurchase rate has been held by the Central Bank at 1.75% due to concerns over a slowing economy.

The Stock Exchange has fallen by 17.6% over 2018 on concerns of the US-China trade war and US interest rate increases. Over the same period, the Won has depreciated 5.15% against the dollar.


Real GDP Growth

Source: International Monetary Fund

South Korea FX vs FV

Source: Bloomberg Spot Prices with Actis methodology for Fundamental Value


Source: International Monetary Fund


Julian Jung-Wook Kim

Please contact Julian Jung-Wook Kim by email at


Moon Jae-in
Democratic Party
Last Election
Next Election
March 2022

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