Economists at Standard Chartered raise the 2021 GDP growth forecast for the South Korean economy to 3.9% from 3.2% to reflect a strong Q1, broad-based growth. What’s more, strong export-led growth and light positioning are set to drive further KRW gains.
South Korean growth momentum likely to be sustained
“We raise our 2021 GDP growth forecast for Korea to 3.9% from 3.2%, mainly to reflect a strong Q1 performance that was balanced across economic sectors. We believe the positive impact of strong exports carried through to domestic consumption and investment, supported by government spending. Exports will likely continue to lead Korea’s recovery for the rest of 2021.”
“Korea’s strong growth, driven by exports and export-led investment, supports our bullish view on the KRW. We find the broadening of Korea’s export rebound encouraging and believe the export momentum can be sustained for longer. We have been tracking the rebound in memory chip prices as a key positive for semiconductor exports, and believe the price effect could boost chip exports further, on top of earlier volume gains.”
“The recent strong pick-up in shipbuilding orders, along with a rebound in exports of goods such as automobiles and chemicals, suggests sustained export strength. We expect a stronger external account to drive further KRW gains.”
“We forecast USD/KRW at 1,100 at end-Q2-2021 and 1,050 at end-2021, with downside risks to our forecasts.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
GBP/USD consolidates above 1.2500, eyes on US PCE data
GBP/USD fluctuates at around 1.2500 in the European session on Friday following the three-day rebound. The PCE inflation data for March will be watched closely by market participants later in the day.
Gold clings to modest daily gains at around $2,350
Gold stays in positive territory at around $2,350 after closing in positive territory on Thursday. The benchmark 10-year US Treasury bond yield edges lower ahead of US PCE Price Index data, allowing XAU/USD to stretch higher.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.