Perspective on Korean Economy
BlackRock has given a positive outlook on the Korean economy, adding that macroeconomic conditions are likely to become favorable for it during the course of this year.
Marc Desmidt, head of Alpha Strategies and Strategic Product Management for Asia Pacific at BlackRock, participated in a meeting in Seoul on Jan. 15 and explained that the recent drop in oil prices in particular is a boon to countries with a high dependence on imported energy sources, including Korea. Therefore, most trading partners of Korea will benefit from the trend.
He also predicted that the Bank of Korea would cut the key rate by 0.25 percentage points within months. “The expansionary fiscal policy of the Korean government is likely to help the Korean economy increase its annual growth rate to 3.6 percent to 3.7 percent this year, approximately 0.3 percentage points higher than in the preceding year,” he continued.
“Korean companies’ performances will be able to get better based on the depreciation of the won,” he mentioned, adding, “We are now very positive about the Korean market, although things were the other way around for years, and undervalued cyclical stocks and exporters would be well advised to make good use of the economic environmental change.”