In the report, “Korea: Economic Growth Fundamentals Remain Strong, Despite Challenges,” Moody’s notes that although Korea’s long term growth potential shall face some difficulties, it is likely that Korea will “outperform most high-income and advanced economies, both in the immediate term and further ahead.”
Moody’s expects that Korea’s real GDP growth will be between 3.5% and 4.0%, with “mitigated downside risks.”
However, the rating agency, also, points out the heavily indebted public-sector corporations, high household debt and Sewol ferry disaster as temporary negative effects on domestic demand.
Additionally, the report notes that demographic realities (aging population) will harm long-term economic growth.
Moody’s expects that the Korean government and President Park Guen-hye would effectively address such risks and challenges and Korea will see robust growth in the next four years, closing “the gap in living standards with weakly performing high-income economies, such as France and Japan,” although it would take more than that to close gaps with more economically dynamic countries such as the United States.
Subscribers can access the report at: Korea: Economic Growth Fundamentals Remain Strong, Despite Challenges/
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He is ranked, for Korea, as one of only two non-Korean attorneys as a Top Attorney by AsiaLaw.
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