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KDI Economic Outlook
2023-2nd Half
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Weather forecast for the Korean economy
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Last Wednesday marked the beginning of winter with the arrival of "Ipdong," signaling colder days ahead. I can't say for sure if that was the reason, but the morning commute felt particularly chilly. However, according to the recently released “KDI Economic Outlook 2023-2nd Half”, the economic weather in Korea for the upcoming year seems to be less harsh than this year.
On the domestic demand front, private consumption and equipment investment remain subdued amidst persistently high interest rates, while indicators for construction investment still exhibit high growth. The Korean economy is expected to undergo a modest recovery of 2.2% in 2024, with exports driving the growth amid slowing domestic demand growth.
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Korea's Economic Recovery in 2024
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Despite weakened domestic demand, Korea's economy is forecasted to experience gradual recovery in 2024, primarily driven by exports, with a growth rate of 2.2%. While slightly higher than the estimated potential growth rate of around 2%, it is important to consider the base effect of the slow growth in 2023, which was 1.4%.
The current account surplus is expected to expand, reaching 426 billion dollars, compared to 319 billion dollars in 2023. Headline inflation is forecast to be at 2.6% in 2024, marking a decline from the 3.6% seen in the previous year, attributed to a slowdown in the growth of domestic demand. The number of employed persons is expected to increase by 210,000, a decrease from 2023’s 320,000, as the pace of domestic demand growth eases, and the unemployment rate is expected to tick up from 2.7% to 3.0%.
However, it is essential to monitor external factors such as escalating tensions in the Middle East leading to sharp increases in global oil prices or a sudden downturn in China's real estate market, as such developments could potentially delay Korea's economic recovery.
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Kukmin Future Forum 2023-
Korean Economic Outlook
and Reform Tasks
'Flexibility'
is the key to
resolving the situation
During the 'Kukmin Future Forum 2023', KDI President Dongchul Cho presented on the topic of "Korean Economic Outlook and Reform Tasks." He initiated his address by acknowledging that the Korean economy is no longer capable of achieving the high growth rates seen in the past and underscored the importance of prioritizing productivity improvement as the primary objective.
The 2023 Asia-Pacific PPP
Practitioners' Network
(APN) Conference
Infrastructure investment for sustainable recovery
and climate resilience
The 2023 APN conference, held in Seoul, Korea, successfully concluded. The event brought together infrastructure and PPP practitioners from across Asia-Pacific to discuss challenges in the post-COVID era and climate change issues in PPP, with a focus on private sector involvement, fund allocation, green and resilient infrastructure, social infrastructure, financing, and aging infrastructure.
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KDI Monthly Economic Trends (2023.11)
Korean economy showing signs of improvement
Korea's economic downturn is showing signs of improvement, primarily driven by the semiconductor industry. Due to the increased demand for travel, industries related to services are experiencing consistent growth in production. The construction sector continues to demonstrate robust growth, and employment levels in related industries have rebounded. However, there is a concern that the repercussions of rising interest rates in the U.S. could constrain Korea's domestic economic activity. Furthermore, escalating tensions in the Middle East is expected to lead to significant fluctuations in global oil prices, emphasizing the need for careful monitoring of the external uncertainties.
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KDI releases the "KDI Economic Outlook" to predict the economic trends for the next year. The report thoroughly analyzes domestic and international economic trends, provides short- to mid-term economic forecasts, and features research on uncertainty factors and countermeasures. Additionally, it offers issue papers called “Analysis of Current Economic Issues," which covers the most recent and pressing economic topics.
It is published four times a year, with major release dates in May and November, providing forecasts for the first and second halves of the year, and revised forecasts are also released in February and August. We hope that the Outlook will be a valuable resource for all of you interested in economic forecast.
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