The price of this business forecast report covers 4 quarterly reports on this country. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

We expect South Korea's real GDP growth to slow to a belowconsensus 1.9% in 2012. China has recently lowered its GDP growth forecast, and our core view of a eurozone recession remains firmly in play.

Disinflation has started to take hold, and further weakness in the domestic economy is likely to place further downward pressure on prices. As inflation continues to ease, the central bank is likely to have more room to enact further monetary easing. We are forecasting at least one 25-basis-point rate cut in the coming months. Domestic demand is likely to be impaired by the slowdown in economic activity, as the jobless rate continues to tick up and high household debt weighs on consumption spending. While we expect investment to remain weak, we do not expect to witness a crash like that in 2008-2009. Businesses have already been pricing in the impending economic weakness, scaling back on investments and drawing down inventory stock levels.

The domestic property market is likely to remain weak through much of 2012 amid the bleak economic landscape. A supply overhang and the country's perennial household debt situation is expected to keep downward pressure on prices.

Major Forecast Changes

We have downgraded our real GDP forecast for 2012 from 2.4% to 1.9%.

Key Risks To Outlook

Downside Risks To Economic Growth Forecast: Should there be a sharper-than-expected downturn in the global economy or even an implosion in South Korea's household debt market, we would certainly expect to see a substantial weakening in the country's exports sector, which, in turn may push the economy into a pronounced recession.

Click for Report details:South Korea Business Forecast Report Q2 2012