- विज्ञापन -
Seoul: South Korea’s economy is facing growing downside risks due to a prolonged slump in the construction sector and deteriorating export conditions, amid concerns about a global trade war, according to a state-run economic think tank. The Korea Development Institute (KDI) highlighted these challenges in its monthly economic assessment, noting that the economy is showing signs of increased risks due to weak construction and worsening export conditions. This marks the third consecutive month the KDI has raised concerns about these risks.
While political uncertainty has eased somewhat, the KDI pointed out that worsening external factors continue to impact South Korea’s export-driven economy. Despite signs of recovery in consumer and business sentiment after the shock of President Yoon Suk Yeol’s brief imposition of martial law in December, the looming threat of a global trade war remains a significant concern, especially with U.S. President Donald Trump escalating tariffs on major trading partners to address America’s trade deficits and broader policy goals.
The KDI also noted the weakening of semiconductor exports, along with the underperformance of other export items, contributing to slow overall export growth. Although South Korea’s manufacturing sector has shown some improvement, the construction sector continues to struggle with low investment and weak employment.
To counter these economic challenges, South Korea’s central bank recently cut its benchmark interest rate by 0.25 percentage points to 2.75 percent, aiming to support economic growth affected by both domestic political turmoil and Trump’s tariffs. This decision followed a rate freeze in January, after two earlier rate cuts in October and November.
