Open figure viewer
Significance
Unlike during the 1997-98 Asian financial crisis, South Korea now has strong fundamentals to confront external economic and political headwinds. However, President Yoon Suk-yeol, who took office in May, is inexperienced, and may steer erratically as regards policy.
Impacts
Joining Washington’s ‘Chip 4’ alliance, as looks inevitable, will cause ructions with Beijing, affecting supply chains and investment.
Yoon’s deflationary 2023 budget, and proposed tax cuts, will not pass the opposition-controlled National Assembly without major amendments.
Untimely attempts to impose excessive austerity carry both economic and political risk.
© Oxford Analytica 2022. All rights reserved. This content contains general information about geopolitical, macroeconomic and social developments or (where stated) other matters. It does not contain advice or recommendations that may be relied on. Where links to external websites are provided, this does not indicate that Oxford Analytica or Emerald agree with, endorse or have checked for accuracy the contents of said sites.
2022
You do not currently have access to this content.
