Economic and Industry Outlook for the Second Half of 2018

Korea’s real economy in early 2018 saw relatively weak exports, with domestic demand exhibiting a slowdown as both consumption and investment declined. While the global economy this year is expected to maintain growth similar to last year’s rate thanks to expansion in both advanced and developing markets, the pace of such growth is predicted to lose momentum in the second half. International oil prices are expected to remain at a monthly average of 70 USD per barrel, as downward price pressure should keep any additional hikes in check, including the possibility of OPEC readjusting targets for curtailing output and higher prices reducing overall crude oil demand. The KRW to USD exchange rate should hover around a monthly average of 1,070 KRW per 1 USD in the second half of the year, inching up slightly over the first half. The stronger dollar reflects an interest rate hike in the U.S. and fears over intensifying trade friction among countries. Exports and investment both drove growth last year but have slowed somewhat this year. Despite this the Korean economy should see growth of 3.0% similar to last year’s mark thanks to higher government spending and consumption amid improving income conditions