Increased Uncertainty Causes Export-Investment Slump To Continue

In the August edition of the Economic Trend Report (Green Book), the Korean Ministry of Planning and Finance defined the recent Korean economy this way: “production has increased moderately but exports and investments continue to be sluggish”.

Source: Chosun Online     Read The Article

Akihiro Komuro
Akihito Komuro

According to the report, the Korean economy in the April-June period, “Under the slowdown in the global economy and sluggishness in the semiconductor industry, uncertainty has increased due to recent Japanese government export control measures and intensifying trade friction between the United States and China. The government said, “We will do everything possible to manage risks, such as responding to Japanese export regulations, and accelerate all fiscal measures, such as supplementary budgets, and mobilize all policy measures.”

PSR Analysis: In this issue of PowerTALK™, I have avoided topics related to politics and macroeconomics, but it is inevitable to mention them when reviewing the current Korean manufacturing industry. Today, South Korea is experiencing economic friction with Japan, and many topics in the major Korean newspapers point out negatively the relationship with Japan.

Although Japan and Korea have strong economic ties, it is unknown how the current deterioration of Japan-Korea relations will affect the Korean manufacturing industry. I expect this problem to be prolonged. Politics cannot easily solve this problem because national sentiment strongly influences this situation.

The future of the Chinese market, which is another key for the Korean manufacturing industry, is uncertain, and now Korea is facing a time of trial. They will have to rethink their growth strategy. PSR