Key View

• We at Fitch Solutions have adjusted our forecast for the South Korean won from an annual average of KRW1,220/USD in 2020 to KRW1,190/USD.
• Our slightly more bullish view on the South Korean won is underpinned by the country’s relative success in containing the Covid-19 outbreak and therefore its ability to support an early economic

Key View

• We have revised our forecast South Korea's fiscal deficit to widen to 4.0% in 2020, up from our previous forecast of 2.9% and an estimated surplus of 0.4% in 2019.
• Our expectations are informed by continued rise in expenditure as the government steps up efforts to tackle the impact of the Covid-19 pandemic.
• Additionally, the

Key View

• We at Fitch Solutions expect the central bank, Bank of Korea (BOK) to hold its benchmark policy rate at 0.50% for the forthcoming quarters.
• The BOK remains ready to cut the rate by a further 25 basis points but we believe that they will only undertake this move if a second wave of Covid-19 cases were to emerge in South Korea.
• Amid

The Latest: The Bank of Korea (BoK, the central bank) kept its base rate on hold at 0.75% at its monetary policy meeting on April 9. This decision followed upon a 50bps rate cut at an emergency meeting held on March 16. The central bank also announced that both economic growth and inflation were likely to fall short of their 2020 projections of 2

Key View

• The introduction of fiscal stimulus in light of the coronavirus will result in a significant shift in the South Korean healthcare market.
• Healthcare spending is unlikely to be boosted over the short term, despite macroeconomic pressures.
• Implementation of new health packages could result in another upward revision.

South Korea

Key View

• We have revised down our South Korea consumer spending projections on the back of the impact of coronavirus.
• Real household spending in the country is now projected at 0.7% y-o-y in 2020, down from an original forecast of 3.1% for the year and a slowing on the 1.9% growth recorded in 2019.
• This revision feeds into our Country Risk

Key View

• We at Fitch Solutions expect the

Key View

• We at Fitch Solutions have revised our forecast for South Korea’s 2020 real GDP growth to 1.7%, down from 2.2% previously, reflecting the rapid spread of Covid-19 (coronavirus) in the country.
• The main channels of weakness include private consumption, investments, and exports of goods and services.
• We also note downside risks to our

Key View

• We maintain our forecast for the Bank of Korea to cut interest rates by a further 25bps to 1.00% by end-2020, following a 25bps rate cut at its October monetary policy meeting.
• Our view is informed by the central bank’s dovish comments as well as our expectations for continued weak growth and low inflation over the coming months.
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