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In April, for the first time in almost two years, South Korea’s consumer spending, industrial output, and investment all declined at the same time.
In the same month, the nation’s inflation moved at an annual pace of 5.4 percent, the fastest in 14 years.
The inflation rate surpassed analysts’ forecast of 5.1 percent and April’s rate of 4.8 percent.
Industrial production sank 3.3 percent compared to March, the first dip in seven months and the largest since May 2020.
Investment in new facilities was off 7.5 for the month, more than tripling March’s 2.2-percent decline.
Retail sales edged down 0.2 percent, recovering slightly from a 0.7-percent decline in March.
President Yoon Suk-yeol warned of an approaching “economic crisis,” saying “our lawn lies in the path of the typhoon.”
Korea’s export-dependent economy suffered from inflation, economic uncertainty, particularly surrounding the Ukraine war, and choked supply chains because of China’s two-month anti-COVID shutdowns, officials said in a public statement.
In late May, South Korea’s central bank bumped its base interest rate by a quarter-point to 1.75 percent, its fifth hike in less than a year.
The new economic data prompted analysts to predict another, similar increase in July.
The bank predicted inflation will remain above 5 percent until at least August.
The bank also cut its 2022 growth forecast for the country’s economy from 3 percent, predicted last February, to 2.7 percent.
On 30 May, the government approved a record $49.3-billion aid package to help small businesses survive current conditions.
TREND FORECAST: Prosperous, inventive, economically stable South Korea bracing for economic danger ahead is a shot that should be heard around the world. Indeed, its President’s warning of an economic typhoon mirrors that of Chief Executive Officer of JPMorgan Chase, Jamie Dimon, which we note in this Trend Journal (See “ECONOMIC ‘HURRICANE’ AHEAD, DIMON SAYS.”)
Again, when these economic warnings are made outside “The Club” they are ignored. But coming from the top members of the money mob and autocrats-in-charge they are taken more seriously… since they have the facts and figures of what’s going on behind the money scene.