Korean Economic and Industrial Outlook for 2023

Sung Wook Hong ()
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Sung Wook Hong: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr

No 23-6, Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: The Korean Economic and Industrial Outlook is published quarterly by the Korea Institute for Industrial Economics and Trade. Visit www.kiet.re.kr for more projections and industrial statistics. In the first half of 2022, the domestic real economy recovered thanks to improved consumption and increased exports, but in the second half of the year, the effects of the economic slowdown became more evident as global inflation intensified, and energy and raw materials prices increased. In 2023, the global economy will grow slowly due to geopolitical uncertainty, tighter monetary policy in major countries, and COVID-19-related uncertainties. International oil prices are expected to fall compared to last year due to a decrease in crude oil demand following interest rate hikes in major countries and a global economic slowdown. However, there is a possibility that supply-demand conditions may deteriorate due to production cuts by major oil-producing countries, which will limit the drop in international oil prices. Meanwhile, the KRW/USD exchange rate may remain at a high level due to the possibility of additional interest rate hikes by the US Federal Reserve (the Fed) and the slowdown in global growth, but may also stabilize at a lower level due to the gradual narrowing of the Korea-US interest rate spread in the second half of the year. In 2023, the domestic economy is expected to grow by 1.9 percent, lower than the previous year, owing to a slowdown in consumption driven by the influence of tighter monetary policy.

Keywords: Korea; 2023 outlook; economic outlook; economic projections; industrial outlook; industrial projections; COVID-19; geopolitical tensions; US-China conflict; interest rates; macroeconomics; monetary policy; tight money; exports; slow growth (search for similar items in EconPapers)
JEL-codes: E10 E17 E21 E22 E23 E24 E27 E30 E31 E32 E51 E52 E58 E60 E62 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2023-02-28
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