Ⅰ. Current Economic Conditions
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The Korean economy is slowing down further due to sluggish exports as external conditions deteriorate. |
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At the same while, there is growing anticipation for an economic recovery backed by improving economic sentiment in China and a gradual decline in inflation in major countries. |
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The Korean economy is expected to experience a deeper slowdown in the first half of 2023, before gradually recovering in the latter half. |
Ⅱ. 2023 Domestic Economic Outlook
1. Assumed External Factors
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The global economy is expected to slow down in 2023. |
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Crude oil price (Dubai) is expected to drop by 17% from 2022 ($96 per barrel), marking around $80 per barrel in 2023. |
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The value of the Korean won, in terms of the real effective exchange rate, is expected to appreciate by about 4% in 2023, reflecting a weaker dollar in recent months. |
2. Domestic Economic Prospects
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Whereas the estimate for private consumption growth is slightly lower than the earlier outlook, the Korean economic outlook remains unchanged at 1.8% as the export slump eases due to the rebounding global economy. |
□ | The current account surplus is projected to reach $27.5 billion in 2023, higher than the earlier projection ($16.0 billion), reflecting the upward adjustments in export growth as well as terms of trade driven by falling oil prices (a larger decrease in import prices). |
□ | Despite the downward adjustment of global oil prices, headline inflation is expected to reach 3.5% in 2023, up from the previous projection (3.2%), due to the deferred impact of supply-side inflationary pressure on public utility rates. |
□ | The number of employed is anticipated to rise by 100,000 in 2023, up from the earlier projection (80,000), reflecting the growth in the domestic face-to-face service industry backed by China’s reopening. |
3. Risks to the Outlook
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Suppose sustained economic recovery in China or extended rate hikes against persistent high inflation, and it may hamper the pace of economic recovery in Korea. |
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Domestically, if the decline in the real estate sector spills over into the real economy, Korea’s economic growth could be hindered, particularly inprivate consumption and construction investment. |
The Department of Macroeconomics is conducting researches on the macro economy and macroeconomic policy, particularly focusing on suggesting the analysis of macroeconomic trends and current status of the economy at home and abroad, the economic forecast, and the policy direction of the macro economy. The Department is also in charge of establishing, sustaining and maintaining various econometric models, based on which it analyses policy effects and develops a long-term economic forecast.
Main TasksDirector, Division of Analysis and Evaluation
82-044-550-4725Director and Vice President, Department of North Korean Economy
82-044-550-4725Fellow
82-044-550-4725Research Associate
82-044-550-4725Specialist
82-044-550-4725Research Associate
82-044-550-4725Research Associate
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