Standard & Poor's (S&P) lowered its South Korean GDP growth forecast for this year from 1.1 percent to negative 0.6 percent on March 23 after having lowered it from 1.6 percent on March 5.
According to the credit rating agency, South Korea’s inflation rate, unemployment rate and benchmark rate at the end of this year are estimated at negative 0.4 percent, 4.2 percent and 0.5 percent, respectively.
In addition, S&P predicted that Hong Kong, Singapore and Japan would show a negative growth of 1.7 percent, 0.8 percent and 1.2 percent this year, respectively. It also said that China’s economic growth rate for this year would stand at 2.9 percent. “Governments, banks, enterprises and households in the Asia-Pacific region are facing an economic loss of US$620 billion with COVID-19 spreading,” it explained, adding, “The region’s economic growth rate is estimated at 2.7 percent.”
Fitch Ratings and Moody’s are predicted to further lower their estimates for South Korea from 0.8 percent and 1.4 percent, respectively. Recently, Capital Economics adjusted its forecast from 1 percent to negative 1 percent. Likewise, the OECD changed its forecast from 2.3 percent to 2 percent.
The South Korean economy showed a negative year-on-year growth only twice in history. It contracted by 1.6 percent during the 1980 oil crisis and 5.1 percent during the Asian financial crisis in 1998.