South Korea's Economy: A Not-So-Bright Outlook for 2025
South Korea's Economic Recession Threatened, according to Atif Mian's Concerns
Atif Mian, an economics professor at Princeton University, shared his thoughts during an interview in Seoul. And it ain't pretty.
Key Economic Forecasts for 2025
The Korea Development Institute (KDI) has cut its growth projection for South Korea in 2025, from 1.6% to a measly 0.8%. This makes it the first major Korean research body to predict a growth rate below 1% for the year [3][4]. The International Monetary Fund (IMF), on the other hand, maintains a 1% growth forecast [1][4]. The Organization for Economic Cooperation and Development (OECD) and the Bank of Korea (BOK) both expect a 1.5% growth [1][4].
Global Trade Tensions and Other Hazards
There are a few reasons behind this grim outlook for South Korea's economy. The ongoing trade tensions globally, particularly due to U.S. tariffs, have stirred up uncertainty in trade policies and hit South Korea hard. Exports to the U.S.—especially in the auto and chip sectors—have taken a significant hit, with a 16.6% and 22.6% decrease, respectively [1][4].
The sluggishness in exports isn't confined to just the semiconductor sector. Overall export performance has slowed down, and the KDI anticipates conditions to worsen with the looming tariff hikes [4]. On top of that, sluggish domestic demand, internal shocks, and rising protectionism like the U.S. tariffs have added to the economic slump [3][5].
So, grab your umbrellas, folks, because the economic storm is brewing in South Korea. And it's not looking like it'll pass anytime soon. But hey, enjoy the ride!
- Atif Mian, during his interview in Seoul, expressed concerns about South Korea's economy in 2025, predicting a not-so-bright outlook.
- In his interview, Atif Mian referred to the Korea Development Institute's (KDI) reduced growth projection for South Korea in 2025, which is now at 0.8%, making it the first major Korean research body to predict a growth rate below 1%.
- Atif Mian also pointed out the negative impact of global trade tensions, particularly US tariffs, on South Korea's business sector, citing significant decreases in exports to the US, especially in the auto and chip sectors.
