Bank of Korea：Recent Economic Developments (July 2023)
The sluggishness of domestic economic growth has somewhat eased, as the decline in exports hasmoderated.Recently, exports of non-IT sectors and exports to the U.S. and EU have been relatively favorable, while IT exports have shown some signs of improvement due to the easing of sluggish semiconductor exports.
Goingforward,domesticeconomicgrowthisexpectedtorecovergraduallywith private consumption continuing its modest recovery and exportsimproving.
Accordingly, GDP growth for this year is expected to be consistent with the May forecast of 1.4%, but uncertainties, such as the economic situation in major countries, remain high.
There are many uncertainties regarding the economic situation in major countries. Upside risks are a favorable growth trend in major countries such as the U.S. and an early rebound in the IT industry, and downside risks are a slow recovery in the Chinese economy.
CPI inflation slowed considerably to 2.7% in June owing to the baseeffect from global oil prices. Looking ahead, it is forecast that consumer price inflation will continue slowing until July, but then will pick up after August and fluctuate at around the 3% level until the end of the year.
Core inflation also slowed to 3.5% in June, and is likely to continue to gradually moderate along the path slightly higher than the previous projection.
There remains a high degree
of uncertainty regardingthefuturepathofinflation,including global oil price movements, economic situation at home and abroad.
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