Asia’s fourth-largest economic system is extensively anticipated to see progress fall beneath 2 % subsequent yr.
South Korea has warned of a deeper financial slowdown than anticipated subsequent yr, extending gross sales tax breaks on some gas oil merchandise and passenger vehicles by a couple of months.
“Our economy’s growth is expected to slow next year due to the effects from a global economic slump, and the difficulty will be focused on the first half,” Finance Minister Choo Kyung-ho mentioned on Monday at a gathering with the ruling get together management, including the economic system was slowing at a extra speedy tempo than anticipated.
The authorities is anticipated later this week to announce its financial coverage methods for subsequent yr, which would be the first full-year assertion for President Yoon Suk-yeol’s administration since its launch in May.
South Korea’s economic system, the fourth-largest in Asia, depends closely on exports starting from vehicles and ships to chips and smartphones. It is extensively anticipated to see progress fall beneath 2 % subsequent yr, down from shut to three % this yr.
The central financial institution final month reduce its projection for subsequent yr’s financial progress to 1.7 % from the earlier 2.1 % in its scheduled revision, citing falling exports and the resultant discount possible in company funding.
As the economic system has now to rely extra on home consumption to offset cooling export demand, the finance ministry has prolonged by as a lot as six months tax breaks on gas oil merchandise and passenger automotive gross sales past their authentic end-2022 expiry.
The ministry is because of unveil its 2023 financial projections and techniques on Wednesday.
President Yoon, struggling in opposition to low approval scores, says exports are your best option for the manufacturing-heavy nation to beat its droop.
China, South Korea’s prime export market, is going through its personal issues as its economic system feels the impact of years of strict controls to battle COVID-19.
