Korea’s Economy Slowing Say Experts

Private economic research institutes are painting gloomy pictures of Korea’s economy.

Samsung Economic Research Institute analyzed on August 14 that the nation’s economy is slowing down. Hyundai Research Institute said on August 13 that the Korean economy has entered a low growth cycle.

Samsung Economic Research Institute said that the Korean economy has now entered a downturn after peaking in the first quarter in its report titled “Causes and Solutions of the Narrowed Economic Cycle.”

The report says that the economy is expected to become cloudier next year due to the slowdown of the global economy and pressures from currencies and high oil prices.

The report conflicts with the government’s analysis which views the economy in good shape thanks to increased consumption and investment.

The report forecasts the economic outlook based on the fact that the economy grew 1.2 percent in the first quarter and 0.8 percent in the second quarter year-on-year this year after growing 1.6 percent in the fourth quarter last year and that inventory level has risen rapidly.

Hong Soon-young, a chief economist at Samsung Economic Research Institute, said, “There are mixed opinions. Optimistic views focusing on benign economic indicators and pessimistic views focusing on worsened economic sentiment are conflicting. However, given that inventories have risen and shipments have fallen, I think the economy peaked in the first quarter and is now slowing down.”

buddy@donga.com