The Korea Chamber of Commerce & Industry and the Bank of Korea hosted a seminar in Seoul on March 16. There, the Bank of Korea remarked that the economies of the United States, China, Japan and the EU are likely to show a gradual growth this year in spite of political and economic uncertainties.
“The growth of the U.S. economy is expected to be based on fiscal expansion and better investor and consumer sentiments,” the central bank explained, continuing, “The Donald Trump administration is planning on an infrastructure investment of US$1 trillion for 10 years to come and tax incentives are likely to be provided for private-sector companies participating in the investment for fiscal burden reduction and investment efficiency improvement.”
According to the bank, the Chinese economy is expected to achieve a stable growth this year. “At present, the three biggest risks of the Chinese economy are the restructuring of industries with excess facilities, overheated real estate market and corporate debts. Under the circumstances, the Chinese government is working on the restructuring of the coal, steel and cement industries and allowing state-run companies with excessive debts to go bankrupt,” the central bank mentioned.
It went on to say that the long-term outcome of the Japanese economy, which has shown a slow growth for long, hinges on industrial restructuring and recovery of trust regarding fiscal soundness. “Hard Brexit on the part of Britain and an increasing political presence of those who are opposed to the system of the EU and immigration are currently the hottest issues in the eurozone,” it added, pointing out that the robustness of the EU system will be tested through the Dutch general election scheduled for this month, French presidential election between April and May and German presidential election in this autumn.
At the seminar, the Bank of Korea mentioned that the South Korean economy is forecast to show a growth rate of 2.4% to 2.7% this year based on improving investment and export conditions although consumption recovery is likely to require some time.