South Korea: Technical recession avoided – UOB

UOB Group’s Economist Ho Woei Chen reviews the latest GDP figures in South Korea.

Key Takeaways

“South Korea’s advance 1Q23 GDP growth was in line with expectations at 0.8% y/y, 0.3% q/q SA. The sequential rebound in GDP meant that South Korea’s economy avoided a technical recession.”

“The q/q expansion was due to stronger private consumption as well as goods exports that were led by motor vehicle shipments even as electronics had remained in a downcycle. This mitigated declines in facilities investment and services exports in 1Q23.”

“We maintain our cautious outlook for South Korea’s growth in 2023 at 1.3% (2022: 2.6%) with lackluster forecasts of 0.8% y/y in 2Q23 and 1.0% y/y in 3Q23 before a recovery to 2.5% y/y in 4Q23.”

“We continue to expect the BOK to remain on hold at 3.50% for the rest of 2023.”