Economists downgrade GDP forecasts for South Korea after disappointing first-quarter knowledge

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“There are reasons to think Q1 may have marked the bottom for South Korea’s growth,” ANZ said, citing indicators that pointed to a likely pick-up in global semiconductor sales — a major product that the country exports.

“Nonetheless, the big picture is that South Korea’s growth will likely be lacklustre in 2019 and any recovery is expected to be gradual. Customs trade data for the first 20 days of April (released earlier this week) suggest the export sector is still struggling for momentum … with semiconductors as the major drag,” the bank explained.

Consultancy Capital Economics was even more pessimistic about the country’s prospects. Its economist, Alex Holmes, wrote in a report that he expects South Korea to grow by 1.8% this year — lower than his previous forecast of 2%.

“Any recovery in growth is likely to be very weak,” said Holmes. He added that exports continue to be challenged, while domestic consumption may stay weak.

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