Korea, Republic Of 

Korea, Republic Of country policy

Policy established 09 October 2007

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 2000 mln euro
• Early warning signal 1500 mln euro
• - of which was used as at 2011-12-31 2 mln euro

Country class: 0

Korea, Republic Of country facts

Atradius DSB Economic Research 
Country Report last updated :  10 December 2009   
Country :  SOUTH KOREA  

Political Situation
New President

Head of state
President Lee Myung-bak (since December 2007 ). PM Han Seung-soo

Form of government
Government of GNP (169 seats out of 299).

Internal Economic Situation
Deceleration Economic Growth

General situation
As signs of economic recovery have strengthened in the last months the government may start to withdraw the emergency stimulus measures gradually in the course of 2010. It is expected that economic growth will decelerate to 0.6% from 2.2% in 2008. All GDP components (excluding public consumption) contribute to the deceleration of economic growth, especially exports and investments decline. Exports, main engine of economy, are expected to drop with 0.6% this year due to weak external demand. Investment decline with 2.9% as domestic and external sales are lower. Thereby are companies finding it harder to obtain bank financing due to problems in the banking sector. Inflation declines to 2.8% in 2009 from 4.7% in 2008. Weak domestic demand and falling commodity prices will put downward pressure on consumer prices. On the other hand there will be higher imported inflation due to weak won.

 
External Economic Situation
Solid

Main sources of foreign exchange
Semiconductors, wireless telecommunications equipment, cars, computers, steel, ships.

Main foreign markets
China (25%), USA (15%), Japan (8%), and Hong Kong (4%).

Main expenses of foreign exchange
Machinery, electronics and electronic equipment, oil, steel.
 
Balance of payments 
In 2008 first deficit since Asia crisis due to high oil and commodity prices. This year CA turns into surplus.