'Double shock' to South Korea like a tsunami...Can "The Worst Economy" revive? [This is the news]

The British daily Financial Times (FT) diagnosed that while the Korean economy is already struggling, it faces the aftermath of martial law and the "double political shock" of U.S. President Donald Trump's return to power.

The newspaper published an analysis titled "Go for Growth: Political Shock Adding Economic Worry" on the 20th (local time), pointing out that this political situation has added to existing problems such as the depreciation of the won and slowing growth in Asia's fourth-largest economy.

Against the U.S. dollar, the won was the worst performance among Asian currencies last year, and the Bank of Korea recently revised down its forecast for this year from earlier, warning that GDP growth would fall short of forecasts last year.

In addition, Trump's tariff threats and domestic political turmoil, which will take office on the same day, are added.

"If Trump's protectionist trade and immigration policies drive up U.S. inflation, the Federal Reserve (Fed) will become more hawkish, putting more pressure on the won and South Korea's growth rate," the newspaper predicted.

"Last year, South Korea became the biggest U.S. investor as South Korean companies rushed to build semiconductor and battery factories," he said. "But the surge in imports of South Korean goods led to Trump's long-running troublesome trade surplus, making South Korea vulnerable to retaliation."

As for the political turmoil, he pointed out, "The ability to respond to Korea's structural economic issues, as well as policy makers' attempts to lobby the next Trump administration, has been paralyzed by the domestic political crisis."

Consumer and business confidence has weakened amid weak won and political instability, while Korean exporters such as technology, steel, petrochemicals, textiles and cosmetics are fiercely competing with low-cost Chinese counterparts.

The FT also pointed out that the rapid progress of Chinese companies in the development and production of memory chips, South Korea's main growth engine, is more worrisome.



AI Anchor|Y-GO
Edit Caption | Lee Mi-young


#This is the news