South Korea’s economic growth is expected to remain close to 3% through 2020 due to fiscal stimulus increasing employment growth, which is reflected by double-digit hikes in the minimum wage in 2018-19 and restructuring in the manufacturing sector. South Korea’s efforts to stabilise the housing market have led to a decline in construction orders for residential property. Inflation is expected to edge up from 1½ per cent toward the 2% target, while the current account surplus will remain above 5% of GDP.
Improved relation with North Korea is a landmark event that can affect South Korea’s economy positively. However, trade protectionism remains a concern due to intermediate goods accounting for four-fifths of South Korea’s exports to China, its largest trading partner, South Korea is vulnerable to higher import barriers on Chinese exports to the United States.
In World Bank’s ease of doing business ranking South Korea was ranked 5 out of 190 countries in 2018. South Korea’s ease of doing business ranking slipped from 4th position in 2017.
South Korea, officially the Republic of Korea, is a country in East Asia, constituting the southern part of the Korean Peninsula. The name Korea is derived from Goryeo, a dynasty which ruled in the Middle Ages. It shares land borders with North Korea to the north, and oversea borders with China to the west and Japan to the east. South Korea lies in the north temperate zone with a predominantly mountainous terrain. It comprises an estimated 51 million residents distributed over 38,375 square miles.
The capital and largest city is Seoul, with a population of 10 million. South Korea is a presidential republic consisting of 17 administrative divisions and is a developed country with the second highest standard of living in Asia, having an HDI of 0.909. It is Asia’s fourth largest economy and the world’s 15th (nominal) or 12th, purchasing power parity, largest economy. The economy is export-driven, with production focusing on electronics, automobiles, ships, machinery, petrochemicals and robotics. South Korea is a member of the United Nations, Uniting for Consensus, G20, WTO, and OECD, and a founding member of APEC and the East Asia Summit.
Korea had estimated population of 51.246 million in the year 2016 and expected to reach 52.509 million by 2022. Korea’s 26.235 million population was employed in 2016 and the unemployment rate was 3.708% of total labor force.
Korea’s real gross domestic product (GDP) was around KRW 1508265 billions in 2016 whereas the nominal GDP was KRW 1637420.80 billions. This resulted in GDP deflator 108.563. Per capita GDP was estimated at USD 27538.81 whereas purchasing power parity (PPP) based per capita GDP was estimated to be at USD 1934.03.
The output gap for Korea in 2016 was negative at 1.4% of the potential GDP. A country’s negative output gap indicates that actual economic output is below the economy’s full potential.
In 2016, Korean government’s revenue was KRW 361750.90 billions whereas the expenditure was KRW 356197 billions. This resulted Korean government’s net lending / borrowing at KRW 5553.90 billion in 2016 indicating that enough financial resources were made available by the government to boost economic growth.
The current account balance for Korea was estimated to be at USD 98.677 billions for the year 2016 and is expected to decrease at a CAGR of 0.22% and reach USD 104.339 by 2022. Despite slight decline in the current account balance Korea will still remain net lender to the whole world.
Scope of South Korea – PESTLE Analysis and Macroeconomic Trends Report
– This report provides information about key macroeconomic indicators for South Korea.
– This report provides PESTLE (political, economic, social, technological, legal and environmental) analysis for South Korea.
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