South Korea's Economic Cooling Continues

The Korea Development Institute (KDI), a state-run think tank, has raised alarms for the fourth month in a row, signaling a cooling trend in the South Korean economy. The latest "Economic Trends April Issue" highlights a rapid deterioration in external conditions, amplifying the downside risks.

External Pressures Mount

Changes in U.S. trade policy and worsening external conditions are notably affecting business sentiment, especially among export companies. The U.S. government's confirmed plan to impose reciprocal tariffs, exceeding initial expectations, has heightened concerns.

Export Growth Declines

The quarterly total export growth rate has seen a continuous decline, with the ICT export growth rate, previously robust, now significantly reduced. The upcoming U.S. tariff increases are expected to further exacerbate export conditions.

Impact on Domestic Economy

The adverse effects on export companies are anticipated to spill over into domestic production and consumption. Despite a rebound in passenger car sales due to reduced individual consumption tax, overall goods and service consumption remain sluggish.