Economic and Industry Outlook for the Second Half of 2017
|Author||Economic Analysis & Forecasting Division||Date||2017.08.29||Series|
In 2017, the global economy is expected to grow faster than the previous year thanks to the expansionary policies from the major countries. Predictions of oil prices indicate that factors attributed to the fall such as the increasing oil production in the U.S., and a rise in the interest rate are more dominant than those to the rise such as OPEC’s decision to extend the reduction in output and the recovery in the global economic. Thus, the estimated price is likely to be around $50 per barrel.
The South Korean won is expected to remain weak against the U.S. dollar, and the won-dollar exchange rate is estimated to average around 1,155 won, lower than the last year, as a result of a fall in the exchange rate in the first half of 2017 despite the fact that the U.S. recently raised the interest rate.
The South Korean economy will likely expand by 2.8% this year, similar to the last year, as a consumer spending is recovered slowly despite an expected drop in exports and investment in the second half of 2017. The external factors such as changes in the monetary policies in the major countries, political uncertainty of the federal election in Germany, and continuity of economic recovery in developing countries may affect Korean economy. Domestically, monetary policy of the Bank of Korea, economic policy direction of the new administration as well as alleviating structural problems such as household debts will be the key variables for the successful second half.