The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
  • World Expo 2030
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
  • Hangzhou Asian Games
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_twitter_on_2022.svgbt_twitter_over_2022.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
  • World Expo 2030
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
  • Hangzhou Asian Games
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_twitter_on_2022.svgbt_twitter_over_2022.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
  • Login
  • Register
  • Login
  • Register
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
  • 1

    BTS' Jungkook to drop 2nd solo single

  • 3

    PHOTOSTrapped along borders

  • 5

    Opposition leader Lee again proposes talks with President Yoon

  • 7

    BTS' Jungkook drops 2nd solo single

  • 9

    Are 'finfluencers' helping or harming investment community?

  • 11

    Korea fails to be included on FTSE Russell's global bond index

  • 13

    Swimmer Kim Woo-min captures 3rd gold in Hangzhou

  • 15

    Poll shows 79% of young Koreans agree on need to improve ties with Japan

  • 17

    My left arm: how right-handed shooter won Asiad medal with left hand

  • 19

    S. Korea cruises past N. Korea in women's basketball

  • 2

    Korea wins gold in League of Legends competition; Faker tops podium

  • 4

    Trailblazing nonagenarian artist honored for redefining Korean fiber art

  • 6

    Pentagon's CWMD strategy document calls N. Korea 'persistent threat'

  • 8

    VIDEOBustling Chuseok: Namsan Hanok Village immerses visitors in Korea's rich traditions

  • 10

    Yoon hosts Chuseok luncheon for Korean atomic bomb victims in Hiroshima

  • 12

    Apple, China met to discuss Beijing's crackdown on western apps: WSJ

  • 14

    Builders vie for leadership in modular construction

  • 16

    Second release of Fukushima wastewater to start next week

  • 18

    S. Korea eliminates N. Korea in women's table tennis doubles

  • 20

    Following successful Asiad debut, swimmer Hwang Sun-woo turns eyes to bright future

Close scrollclosebutton

Close for 24 hours

Open
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
Sun, October 1, 2023 | 08:13
Economy
Korean economy pushed closer toward 'perfect storm'
Posted : 2022-06-24 16:36
Updated : 2022-06-26 10:49
Yi Whan-woo
Print PreviewPrint Preview
Font Size UpFont Size Up
Font Size DownFont Size Down
  • facebook
  • twitter
  • kakaolink
  • whatsapp
  • reddit
  • mailto
  • link
                                                                                                 First Vice Finance Minister Bang Ki-sun, second from left, presides over an emergency meeting of economy-related vice ministers at Government Complex in Seoul, Friday. Yonhap
First Vice Finance Minister Bang Ki-sun, second from left, presides over an emergency meeting of economy-related vice ministers at Government Complex in Seoul, Friday. Yonhap

By Yi Whan-woo

Korea is feared to be on the brink of a "perfect economic storm" that financial authorities have been warning about repeatedly for months, with the economy becoming more vulnerable amid the depreciation of the Korean won, plummeting stocks and soaring inflation.

Authorities and economists warn the serious nature of the Korean economy in 2022 is conjuring up deja vu of the worldwide oil crisis in the 1970s and the 2008-09 global financial crisis.

For instance, the Korean currency on Thursday fell below 1,300 won per U.S. dollar ― the weakest level since July 2009 in the midst of the global financial crisis.

The won-dollar exchange rate complicates problems associated with the triple whammy of a strengthening dollar, rising prices and interest rate hikes.

Among the problems are a sharper rise in import prices and widening trade deficit adding to the gloomy forecast on Korea's slowing growth. The year-on-year increase rate of import prices has been outpacing that of exports for 12 consecutive months.

Regarding stock markets, the benchmark Kospi and junior bourse Kosdaq hit new annual lows seven times in June alone.

The former closed at a 19-month low of 2,314.32 points, Thursday, while the latter is speculated to retreat to below 600 points compared to the 1,000-point level at the beginning of the year.

                                                                                                 First Vice Finance Minister Bang Ki-sun, second from left, presides over an emergency meeting of economy-related vice ministers at Government Complex in Seoul, Friday. Yonhap
A signboard for currency exchange is seen at a tourist district in Myeong-dong, central Seoul, Thursday. Yonhap

"All these problems have existed but are becoming more complicated to heighten concerns over a perfect economic storm," Jun Kwang-woo, chairman of the Institute for Global Economics and former chairman of the Financial Services Commission (FSC), told The Korea Times, Friday.

Speaking at a meeting with chiefs of economic think tanks early this week, Financial Supervisory Service (FSS) Governor Lee Bok-hyun compared the downturn in this year's economy with that of the oil crisis.

Lee is the latest to join a string of financial authorities, including Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho and Bank of Korea (BOK) Governor Rhee Chang-yong, warning against the conditions of a perfect economic storm.

"This time we could face a more dangerous crisis with the global value chain more closely intertwined ― it could lead to an unprecedented perfect storm," Lee said.

Jun said the plunging stock market is "unlikely to bounce back in the short term" due to snowballing household debts and the BOK's accelerated hike in benchmark interest rate.

He noted that investors include young borrowers who suffered losses after taking out massive loans when the base rate was low and now are under mounting pressure to make repayments at higher rates. The benchmark interest rate was raised three times this year and stands at 1.75 percent, the highest level since the pandemic began.

Market observers say the Kospi may dip below 2,200 points in the extreme case, which will aggravate woes of the young borrowers.

Choi Hee-nam, a former deputy finance minister and also former Korea Investment Corp. chairman, also told The Korea Times that the household debt can hit the stock market harder.

"The stock market is closely related to the economic forecast, and considering household debt is a major threat to the Korean economy, failure to rescue young borrowers will deal a blow on the market."

For possible solutions, Choi suggested the finance ministry "capitalize on every possible policy tool."

Despite the fiscal deficit that spiked under the previous Moon Jae-in administration, Choi still said the government "can spare efforts to provide financial support for those who need it."

During an emergency meeting of economy-related vice ministers, Friday, First Vice Finance Minister Bang Ki-sun said the government will "work thoroughly to make exports increase and expand."

Asked whether the BOK should take a "big step" of raising the policy rate by 50 basis points to tame inflation, Hyundai Research Institute economist Joo Won said, "It should not be so drastic as to affect people's livelihood."
Emailyistory@koreatimes.co.kr Article ListMore articles by this reporter
 
miguel
wooribank
LG
Top 10 Stories
1Guide to Chuseok celebrations across Korea Guide to Chuseok celebrations across Korea
2Chuseok exodus begins ahead of extended 6-day holiday Chuseok exodus begins ahead of extended 6-day holiday
3Korea sees record-low births in July Korea sees record-low births in July
4Hyundai E&C to build upmarket apartment complex in Seoul's Gwanak District Hyundai E&C to build upmarket apartment complex in Seoul's Gwanak District
5[INTERVIEW] Risk-averse culture is forcing daring creators to flee showbiz INTERVIEWRisk-averse culture is forcing daring creators to flee showbiz
6Korea on track to prove esports prowess at Asian Games Korea on track to prove esports prowess at Asian Games
7Political battle intensifies after court rejects Lee's arrest warrant Political battle intensifies after court rejects Lee's arrest warrant
8Lotte focuses on health care, mobility to spur growth Lotte focuses on health care, mobility to spur growth
9DMZ Open Int'l Music Festival to be held in Goyang in November DMZ Open Int'l Music Festival to be held in Goyang in November
10Koreans adapt to soaring food prices Koreans adapt to soaring food prices
Top 5 Entertainment News
1[INTERVIEW] 'Coexistence of different art hubs across Asia is necessary': Art Week Tokyo Director INTERVIEW'Coexistence of different art hubs across Asia is necessary': Art Week Tokyo Director
2M+ deputy director discusses Seoul's potential to challenge Hong Kong as Asia's art hub M+ deputy director discusses Seoul's potential to challenge Hong Kong as Asia's art hub
3Trailblazing nonagenarian artist honored for redefining Korean fiber art Trailblazing nonagenarian artist honored for redefining Korean fiber art
4[INTERVIEW] With '30 Days,' Kang Ha-neul finds new level of comfort in acting INTERVIEWWith '30 Days,' Kang Ha-neul finds new level of comfort in acting
5Rwandan artists bring diversity to Seoul's art scene Rwandan artists bring diversity to Seoul's art scene
DARKROOM
  • Turkey-Syria earthquake

    Turkey-Syria earthquake

  • Nepal plane crash

    Nepal plane crash

  • Brazil capital uprising

    Brazil capital uprising

  • Happy New Year 2023

    Happy New Year 2023

  • World Cup 2022 Final - Argentina vs France

    World Cup 2022 Final - Argentina vs France

CEO & Publisher : Oh Young-jin
Digital News Email : webmaster@koreatimes.co.kr
Tel : 02-724-2114
Online newspaper registration No : 서울,아52844
Date of registration : 2020.02.05
Masthead : The Korea Times
Copyright © koreatimes.co.kr. All rights reserved.
  • About Us
  • Introduction
  • History
  • Contact Us
  • Products & Services
  • Subscribe
  • E-paper
  • RSS Service
  • Content Sales
  • Site Map
  • Policy
  • Code of Ethics
  • Ombudsman
  • Privacy Statement
  • Terms of Service
  • Copyright Policy
  • Family Site
  • Hankook Ilbo
  • Dongwha Group