Eng

Prolonged political standoff shadows South Korea's economy

XINHUA
發布於 1天前 • Liu Tian,Lu Rui,Feng Yasong,Sun Yiran,Jun Hyosang
Supporters of impeached South Korean President Yoon Suk-yeol gather in a rally near the presidential residence in Seoul, South Korea, Jan. 12, 2025. (Photo by Jun Hyosang/Xinhua)

Analysts said that South Korea's economy is experiencing a sharp decline in growth rate due to severely weakened domestic demand and a slowdown in export growth. Amid a weakening economic foundation, the ongoing political standoff will rapidly damage both domestic and foreign investor confidence, as well as consumer sentiment.

SEOUL, Jan. 14 (Xinhua) -- The current political uncertainty in South Korea over President Yoon Suk-yeol's impeachment has shadowed the country's economy, as analysts worry that the standoff will be prolonged and damage investors' confidence.

廣告(請繼續閱讀本文)

International credit rating agency Moody's Ratings said the impact of political instability on the South Korean economy so far appears to be limited, but prolonged situations that disrupt economic activity could negatively impact credit, according to local media reports.

Prolonged political fallout could weigh on the government's ability to effectively pass important legislation, including the budget, domestic demand and economic growth, and lower investors' preference for South Korean assets, putting a strain on financial markets, the YTN reported, citing Moody's.

"The martial law and political instability over the impeachment of the president are eroding South Korea's international credibility. While the indicators themselves have not yet reached a worrisome level, if external perceptions of South Korea's economy become fixed in a negative light, this alone could exacerbate the situation," said the Chosun Daily in an editorial.

廣告(請繼續閱讀本文)

If the sovereign credit rating is downgraded, both the real economy and the financial sector will be impacted, as the government, state-owned enterprises, and corporations will have to bear higher borrowing costs when seeking loans from abroad, said South Korean newspaper Hankyoreh, adding the current situation over Yoon has plunged South Korea's sovereign credit rating, which has remained at its highest level over the past decade, into a precarious crisis.

Data showed that after the impeachment of Prime Minister Han Duck-soo, who had been serving as acting president following President Yoon's impeachment, the exchange rate of South Korean won slid to 1,487 against 1 U.S. dollar, the lowest in more than 15 years for the first time. The market expected there would be a chance of a further depreciation of the won if the uncertainty continued.

A sharp decline in exchange rates would deal a severe blow to South Korea's economy, which relies heavily on imports of raw materials and energy, economists said, adding a stronger U.S. dollar will increase the cost of raw materials and the burden of dollar-denominated debt, endangering the country's businesses, and rising import prices would also exacerbate the financial strain on vulnerable groups, further worsening the stagnation in consumption.

廣告(請繼續閱讀本文)
Protesters in favor of the impeachment of South Korean President Yoon Suk-yeol shout slogans “Immediate Arrest” during a rally near the presidential residence in Seoul, South Korea, Jan. 12, 2025.(Photo by Jun Hyosang/Xinhua)

Meanwhile, according to the country's central bank, the Bank of Korea, the monthly Composite Business Sentiment Index for December jumped 4.5 points lower from November's figure, hitting the lowest level since September 2020.

The central bank last year lowered its growth rate of the country's 2025 forecast from 2.1 percent to 1.9 percent and projected growth of 1.8 percent for 2026. "In other words, the economy is not just facing a temporary downturn but is entering a low-growth trajectory that falls short of its potential growth rate," said the Chosun Daily.

Analysts said that South Korea's economy is experiencing a sharp decline in growth rate due to severely weakened domestic demand and a slowdown in export growth. Amid a weakening economic foundation, the ongoing political standoff will rapidly damage both domestic and foreign investor confidence, as well as consumer sentiment.

Local reports also warned that the prolonged political uncertainty triggered by Yoon's impeachment and the over 4 trillion won budget cut for next year have brought the South Korean government's major economic policies to a standstill.

Experts agree that as the global economic landscape is changing and countries are formulating industrial and trade policies to respond to a potential U.S. trade policy change, it is time for the political circles in the country to unite to avoid falling behind, according to a monthly BusinessKorea.

The Chosun Daily urged that political instability must not be allowed to undermine the economy and people's livelihoods. "The political circle should pool its wisdom and work swiftly to eliminate the uncertainties brought about by this situation."■

更多 Eng 相關文章

Update: S. Korean President Yoon arrested over martial law imposition
XINHUA
China's Poyang Lake becomes winter haven for 600,000 migratory birds
XINHUA
Sichuan opera lights up train station in China's Chongqing
XINHUA
Interview: Speed skater Qu on overcoming challenges, achieving Olympic gold
XINHUA
ASP APAC's VP of Commercial Kevin Neo Spotlights Workplace Culture to Drive Well-balanced Growth
PR Newswire (美通社)
Firefighters continue battling LA wildfires amid dangerous weather warning
XINHUA
Xinhua News | China welcomes foreign tourists to enjoy Chinese New Year: FM spokesperson
XINHUA
Xinhua News | S. Korean president arrested in residence over martial law imposition
XINHUA
Chinese scientists develop research platform for "artificial sun"
XINHUA
Network People Services Technologies Applauded by Frost & Sullivan for Providing Cutting-edge Digital Payment Technology and for Its Market-leading Position
PR Newswire (美通社)
AXA launches new "WealthAhead Savings Plan"
PR Newswire (美通社)
Asia Album: Indian people celebrate Lohri festival
XINHUA
JOHNNY BIGG EXPANDS RETAIL PRESENCE WITH NEW CONCESSIONS IN BELK STORES
PR Newswire (美通社)
Xinhua News | Beijing airport to handle 6.1 mln passenger trips during Spring Festival travel rush
XINHUA
Beijing airport to handle 6.1 mln passenger trips during Spring Festival travel rush
XINHUA
Tech-infused: High-speed trains undergo check-ups by robots in China's Wuhan
XINHUA
Economic powerhouse Guangdong targets 2025 GDP growth of around 5 pct
XINHUA
APPOINTMENT OF ARVIND BHANDARI AS CHAIRMAN AND MANAGING DIRECTOR OF GOODYEAR INDIA
PR Newswire (美通社)
Colonists' exploitation of Cambodia in 19th century
XINHUA
In the name of Sihanouk (2): Cambodia-China friendship "has benefited my country and people"
XINHUA
S. Korean investigators arrest president Yoon in residence
XINHUA
Infosys and Tennis Australia Create New Generative AI Innovations at the Australian Open 2025
PR Newswire (美通社)
note inc. Forms Capital and Business Alliance with Google, Using Generative AI to Further Support Creators' Activities
PR Newswire (美通社)
Yoon says he accepted illegal investigation to prevent bloodshed
XINHUA
S. KOREAN PRESIDENT YOON ARRESTED, BEING MOVED TO INVESTIGATIVE UNIT FOR QUESTIONING
XINHUA
Xinhua Photo Daily | Jan. 15, 2025
XINHUA