Is Korea's Shaky Economy on the Right Track?

South Korea, once praised for its rapid economic growth and technological innovation, is now facing growing uncertainty. In recent months, the nation’s economic indicators have shown worrying signs — sluggish GDP growth, declining exports, and rising household debt. The Korean won has weakened against the dollar, while consumer confidence continues to drop. Many are now questioning whether Korea’s economy is truly on the right track. According to a survey taken in January targeting 508 Korean companies about Korea's possibility of an economic crisis, 96.9% of companies responded that Korea will face an economic crisis this year.

What are the causes of Korea’s economic downfall?

Due to the new tariffs imposed by the United States, Korean industries such as steel and electric vehicles were forced to raise their product prices when selling to the U.S. market. This resulted in a sharp decline in exports and profits for these key industries. These negative factors have created uncertainty and instability in Korea's domestic stock market. As a result, many investors have engaged in large-scale sell-offs of Korean stocks, leading to a significant drop in stock prices. A sharp decline in the stock market is often seen as both a signal and a consequence of a broader economic crisis. Stock prices generally reflect investor confidence and future expectations about corporate earnings and economic growth. In this case, the collapse of the Korean stock market suggests that investors, concerned about the future prospects of Korean industries under the pressure of U.S. tariffs, have lost confidence. This loss of trust has accelerated Korea’s economic downturn.

(korea’s KOSPI during 3/1~4/1(new U.S tariff declaration))