Slow export growth poses economic risks for Seoul

Significance As is often the case, the latest domestic economic indicators are patchier. The Bank of Korea (BoK)’s rate cuts last month were slight and late. Parliamentary debate on the 2025 budget has begun, but President Yoon Suk-yeol’s plea for bipartisan cooperation to enact “urgent and critical” reforms in labour, education, healthcare and the pension system faces weak support. Impacts US President-elect Donald Trump may impose import tariffs, and will certainly harry Seoul to unwind high-tech commercial links with China. The twin economic risks going forward are an end to the artificial intelligence boom and/or renewed US pressure to delink from China. With the population falling, further delays to pension and healthcare reforms will weaken the economy’s prospects and risk insolvency.