Journalist

Kim Yeon-jae
  • (UPDATE) March factory output sharply eases in Korea as Hormuz shock ripples
    (UPDATE) March factory output sharply eases in Korea as Hormuz shock ripples *Updated with additional information and market response. SEOUL, April 30 (AJP) — South Korea’s manufacturing and investment activity slowed sharply in March as supply disruptions from the Middle East’s key energy waterway began to weigh on the import-dependent economy in the first month of the war, data showed Thursday. According to March industrial activity data from the Ministry of Data and Statistics, mining and manufacturing output eked out a 0.3 percent gain from the previous month, sharply slowing from a 5.3 percent increase in February. Overall industrial output also slowed to 0.3 percent in March from 2.1 percent in February, although service-sector output accelerated to 1.4 percent, partially offsetting the slowdown. Retail sales, a barometer of consumption, rose 1.8 percent, reversing a 0.3 percent drop a month earlier, as higher energy and chip prices spurred preemptive fuel purchases and lifted demand for finished IT products. Investment momentum weakened markedly. Facility investment rose 1.5 percent, compared with a 14.6 percent jump in February, while construction investment plunged 7.3 percent after surging 13 percent the previous month. Supply disruption began to take toll on factory activities. Chipmaking fell 8.1 percent and refining 6.3 percent as producers adjusted output as imports of Middle East raw materials remained uncertain from the blockade of the Strait of Hormuz. Against a year-ago period, industrial output remained resilient on an annual basis, rising 3.5 percent year-on-year on strong chip demand. Consumer spending rebound was largely driven by 9.8-percent spike in computer and IT products on chip-flation worries. The coincident index added 0.5 point and the leading index climbed 0.7 point, suggesting underlying economic conditions have yet to fully reflect the external shock. Amid growing uncertainties, the KOSPI fell a tad, 0.43 percent, to 6,663.94 after testing new intraday high while the Korean won slipped to 1,485.9 against the U.S. dollar amid spike in oil prices. 2026-04-30 09:09:47
  • Korean Inc. turns to 91-day financing as corporate debt market remains icy
    Korean Inc. turns to 91-day financing as corporate debt market remains icy SEOUL, April 29 (AJP) — South Korean companies are turning to three-month financing to meet debt obligation, as new bond issues become increasingly difficult with lower-rated yields hovering above 10 percent amid icy demand. Bond issuance by non-financial companies fell 6.5 percent from a month earlier to 4.78 trillion won in March, even as overall bond issuance rose 3.8 percent to 19.98 trillion won ($13.56 billion), according to data released Wednesday by the Financial Supervisory Service (FSS). The increase was driven largely by financial issuers and asset-backed securities (ABS), while corporate bond issuance was mostly limited to refinancing existing debt. “Excluding the first quarter, April is a period with a heavy repayment burden, with 10.7 trillion won in corporate bonds reaching maturity,” said Kim Eun-ki, a researcher at Samsung Securities. “The overall atmosphere for issuers is to wait out the storm as bond yields are rising fast.” Corporate bonds recorded a net repayment of 449 billion won in March, following a 3.41 trillion won net repayment in February, marking two consecutive months of net outflows. About 85.6 percent of general corporate bonds issued in March were used to repay existing debt, while 98.5 percent of issuance came from A-rated or higher investment-grade companies, underscoring risk aversion on both the demand and supply sides. Companies are cancelling or downsizing debt offerings as bookbuilding demand weakens and yields rise rapidly. Recent deals also point to growing market bifurcation. Mid-tier issuers such as Lotte Hi-Mart and LG HelloVision were forced to price bonds at around 20 to 40 basis points above fair value, with order books barely covering the deal size. By contrast, top-tier borrowers continued to draw demand several times the amount offered. Maturities are also getting shorter. Long-term bonds with maturities of more than five years amounted to just 120 billion won, or 2.5 percent of total issuance. Medium-term bonds of one to five years accounted for 97.5 percent, showing that companies are avoiding long-term financing amid persistent rate pressure. Issuers are raising only the minimum needed to meet debt obligations. An estimated 10.7 trillion won in general corporate bonds comes due this month, adding pressure to refinance in an unfavorable rate environment. As of Wednesday morning, the three-year government bond yield stood at 3.525 percent, while the three-year AA- corporate bond yield was 4.185 percent. The resulting credit spread of about 65 basis points has widened from around 50 basis points in the second half of last year, indicating that the credit premium paid by companies is rising again. The gap is far wider in the lower-rated market. The three-year BBB- corporate bond yield reached 10.001 percent, pushing the spread against AA- bonds to about 580 basis points. That is approaching levels seen during the 2022 Legoland crisis, when the credit market tightened sharply and the AA- to BBB- spread widened to around 600 basis points. Market watchers say access to bond financing is again becoming effectively restricted for lower-rated companies. Their lifeline are 91-day commercial papers whose rate stood at 3.06 percent, about 115 basis points lower than the AA- corporate bond yield. That makes short-term borrowing a much cheaper option for companies trying to bridge near-term maturities. Total issuance of commercial paper and short-term bonds reached 200.47 trillion won in March, up 25.6 percent from the previous month. The surge suggests that corporate funding strategies are shifting from long-term debt to short-term financing, rather than merely reflecting a temporary rise in liquidity demand. 2026-04-29 16:44:11
  • Minsky moment looming for Koreas financial sector
    Minsky moment looming for Korea's financial sector SEOUL, April 28 (AJP) — Loose liquidity binges tend to end in a Minsky moment — the payback for easy gains. For South Korea’s financial sector, that moment may be inching closer, as a domestic slowdown, supply-side inflation and accumulated leverage begin to converge. Delinquency rates are rising with unusual speed. The country’s five largest commercial banks reported an average delinquency rate of 0.4 percent for the first quarter of 2026, up from 0.34 percent in the previous quarter. As of April 7, the figure had already climbed to 0.46 percent — the highest level in about a decade, since the 2015 collapse of STX Group. The first cracks appeared in loans to small and medium-sized enterprises (SMEs). At Hana Bank, SME delinquency rose to 0.61 percent from 0.47 percent a quarter earlier, the highest since its 2015 relaunch. Woori Bank reported a similar jump to 0.61 percent, the highest since the creation of Woori Financial Group in 2019. Large corporates remain relatively insulated, though pockets of risk persist. KB Kookmin Bank stands out for its exposure to troubled real estate project financing. The deterioration is no longer just marginal — it is accumulating in size. Non-performing loans (NPLs) at four major banks, excluding NH, surged 11.6 percent in the first quarter to 5.77 trillion won ($3.92 billion), crossing the 5 trillion won mark for the first time in nearly eight years, since the fallout from the Hanjin Shipping bankruptcy. While industry insiders say most loans are unlikely to be written off, the worsening economic outlook is casting doubt on that view. "Internally, we acknowledge the growing risks and are working to diversify our exposure," said an official from one of the four major banks, speaking on condition of anonymity. Banks plan to secure maximum loan-loss provisions while tightening lending regulations for distressed borrowers. The average NPL coverage ratio fell to 153.8 percent from 172.0 percent at end-2025, even as banks posted robust earnings of nearly 4 trillion won in the first quarter, including a record 1.16 trillion won at Shinhan Bank. Households are showing similar fault lines. Total household debt, already above 1,850 trillion won, expanded by another 3.5 trillion won last month. Mortgage rates — tied to more than 1,000 trillion won of that debt — continue to rise. According to the Bank of Korea, the average rate on new household loans climbed to 4.34 percent in March, the highest in nearly two and a half years. More concerning is the shift in debt quality. High-interest card loans, typically exceeding 10 percent, have ballooned to a record 43 trillion won. Long-term delinquencies of more than six months reached 470 billion won, surpassing 1 percent of total credit — the highest level in 11 years. The macro backdrop offers little relief. Stronger-than-expected first-quarter growth of 1.7 percent has reinforced the central bank’s hawkish stance, keeping the possibility of a rate hike alive. Under Governor Shin Hyun-song, price stability remains the priority — even at the risk of further squeezing already vulnerable borrowers. “Higher rates are boosting bank earnings, but at the cost of rising systemic risk,” said Park Hye-jin, a researcher at Daishin Securities. “It is a paradox where profitability and instability rise together.” While Korean equities remain among the best performers this year, other asset classes are weakening. The won traded at 1,473.6 per dollar on Tuesday, down more than 2 percent from the start of the year. Bond yields have surged, with the three-year Treasury at 3.529 percent and the 10-year at 3.861 percent — both up more than 60 basis points year to date. The signals are not yet a crisis. But the pattern is familiar: leverage builds quietly, stress emerges at the edges, and buffers erode faster than expected. That is typically how a Minsky cycle turns. 2026-04-28 16:43:26
  • Korea business sentiment rises on illusion of recovery as inventories shrink
    Korea business sentiment rises on illusion of recovery as inventories shrink SEOUL, April 28 (AJP) — Pessimism among South Korean businesses eased to a 21-month low in April, but the improvement largely reflected inventory drawdowns driven by Middle East supply disruptions rather than a genuine recovery in demand, data showed Tuesday. The Composite Business Sentiment Index (CBSI) for all industries rose 0.8 point from a month earlier to 94.9, the highest since July 2024, according to the Bank of Korea. Despite the gain, the index remained below the 100 mark, indicating that negative sentiment still outweighs optimism. Strip out the inventory effect, and the picture weakens. The central bank estimated that overall sentiment would have slipped by 0.1 point across industries and by 0.4 point in manufacturing. “While manufacturing conditions improved on sustained exports and higher sales prices, the drop in inventories partly reflects firms running down existing stock to cope with disruptions in raw material supplies,” said Lee Heung-hoo, head of the BOK’s economic sentiment survey team. Manufacturing sentiment rose 2.0 points to 99.1, its highest level this year and just shy of the neutral threshold. The outlook for next month also improved, climbing 2.1 points to 98.0. By firm size, large corporations reached the 100 benchmark, while small and medium-sized enterprises (SMEs) lagged at 96.8. Export-oriented firms continued to outperform, posting a CBSI of 103.4 for a fourth consecutive month, compared with 96.4 for domestically focused companies. The improvement in manufacturing was overwhelmingly driven by inventories. Falling stock levels contributed 2.3 points to the CBSI, compared with a 0.7-point gain from better business conditions. As a countercyclical component, lower inventories mechanically lift the index even when underlying demand remains weak. Outside manufacturing, momentum was far weaker. The non-manufacturing CBSI edged up just 0.1 point to 92.1, while the outlook for next month remained unchanged at 91.2. In services, sentiment deteriorated, slipping to 92.9 from 93.4, as rising oil prices tied to the Middle East conflict pushed up sea and air freight costs, particularly weighing on wholesale and retail sectors. Cost pressures have emerged as the dominant concern across industries. In manufacturing, the share of firms citing rising raw material prices as a key difficulty surged 13.2 percentage points to 34.2 percent. In non-manufacturing, the figure rose to 19.4 percent, also the top concern, reflecting elevated energy prices, logistics disruptions around the Strait of Hormuz, and a weakening Korean won, which has depreciated by more than 2 percent from 1,458 per dollar in January to around 1,488 this month. Detailed indicators point to a widening margin squeeze. The manufacturing business conditions index rose 3 points to 74, with gains in sales and new orders, but profitability fell 5 points to 68 and financial conditions worsened by 3 points to 76. The raw material purchase price index jumped 12 points to 149, the highest since October, far outpacing the rise in product sales prices, which climbed to 110 — insufficient to offset rising input costs. The broader Economic Sentiment Index (ESI), which combines business and consumer confidence, fell 2.3 points to 91.7, marking a second straight monthly decline and the lowest level in six months. Its cyclical component also edged down 0.3 point to 94.4, signaling a slowdown in underlying economic momentum. The survey was conducted from April 9 to 16, covering 3,205 companies, including 1,781 manufacturers and 1,424 non-manufacturers. 2026-04-28 11:31:11
  • South Koreas 1.7% growth may mark its ceiling as structural limits bite
    South Korea's 1.7% growth may mark its ceiling as structural limits bite SEOUL, April 27 (AJP)- South Korea’s 1.7% first-quarter growth didn’t just beat expectations; it likely hit the ceiling. According to OECD estimates, the surprise performance suggests the economy is already running at full capacity, signaling that the nation’s structural growth potential has effectively reached its limit. Gross domestic product rose 1.7 percent in the January–March period from the previous quarter, nearly double the Bank of Korea’s earlier forecast of 0.9 percent. Yet the OECD now sees Korea’s potential growth rate falling to 1.71 percent this year and further to 1.57 percent next year, down sharply from 2.50 percent in 2021. It is projected to stagnate at around 1.52 percent by late 2027. While most advanced economies face a slowdown this year due to elevated oil prices and supply disruptions linked to Middle East tensions, Korea’s decline has been notably steeper. From 3.6 percent in 2012, the country’s potential growth rate has dropped by nearly 1.9 percentage points over the past 14 years — implying that more than half of its growth capacity has eroded. By comparison, U.S. potential growth has held relatively stable at around 2 percent, while China’s has slowed from about 8 percent to roughly 4.5 percent. Japan has seen a more gradual decline, from 0.8 percent in 2012 to around 0.2 percent this year. A weakening currency is emerging as a key pressure point. A softer won raises import costs, compresses corporate margins and public finances, and adds inflationary pressure that can constrain sustainable growth. The Korean won has depreciated by more than 30 percent against the U.S. dollar, weakening from around 1,130 per dollar in 2012 to below 1,480 this month. Over the same period, the Chinese yuan declined by about 14 percent, while the Japanese yen fell more sharply. In real effective terms, the weakness is more pronounced. According to the Bank for International Settlements, Korea’s real effective exchange rate stood at 85.44 (2020=100) at end-March — its lowest level in 17 years and among the weakest globally. Economists point to sustained capital outflows and excess liquidity as key drivers. In January alone, residents’ overseas securities investment rose by $13.46 billion, the highest monthly figure on record. For 2025 as a whole, outbound investment exceeded $110 billion, nearly triple the previous year’s level. At the same time, money supply growth has remained elevated. Bank of Korea data show M2 rose 8.75 percent year-on-year in February. Even excluding exchange-traded funds, liquidity expanded 4.9 percent — still outpacing U.S. growth. “One of the main reasons for the won’s depreciation is that Korea’s liquidity supply is expanding faster than that of the U.S.,” said Kim Kwang-seok, head of economic research at the Institute for Korean Economic & Industry. Policymakers have also flagged inflation risks tied to the currency. At his final Monetary Policy Committee meeting on April 10, outgoing BOK Governor Rhee Chang-yong warned that “inflationary uncertainties linked to the weak won remain high” amid geopolitical tensions in the Middle East. Demographics add a deeper structural drag. South Korea’s fertility rate fell to 0.8 in 2025, the lowest in the world, while the share of the population aged 65 or older has risen from below 12 percent in 2012 to more than 20 percent today. The working-age population has declined from 73 percent to about 69 percent over the same period, while manufacturing employment fell from a peak of 4.6 million in 2018 to 4.2 million in 2025. The Korea Employment Information Service expects job growth to slow sharply, with total employment projected to increase by only about 65,000 over the next decade. Experts say structural reform is now unavoidable. “The economy is showing a K-shaped growth pattern heavily reliant on semiconductors,” Kim said, calling for broader industrial diversification. “To sustain growth, labor must be reallocated to sectors with rising demand,” said Lee Chang-soo, head of KEIS. “As demand for low-skilled jobs declines and the need for high-skilled workers increases, comprehensive retraining programs will be necessary.” The won closed at 1,472.5 per dollar on Monday, up 12 won on the day. Despite a third consecutive session of gains, it remains about 2 percent weaker than the 1,442.5 level at the start of the year. 2026-04-27 17:20:56
  • Koreas Q1 growth beats expectations, but beyond hinges largely on Hormuz
    Korea's Q1 growth beats expectations, but beyond hinges largely on Hormuz SEOUL, April 24 (AJP) — South Korea’s economy grew a stronger-than-expected 1.7 percent in the first quarter, nearly double the Bank of Korea’s estimate, raising hopes for resilience despite mounting external shocks. But whether the momentum can last hinges on the duration of the nearly two-month Middle East standoff and Korea’s ability to withstand an energy shock across an economy still fragilely powered by chip exports. Following the data, the Bank of Korea (BOK) expressed confidence that the economy can weather this year’s Black Swan crisis in the Gulf. “Since the first-quarter growth rate is heavily reflected in the annual figures, we expect to meet our original growth target of 2 percent without significant difficulty,” said Lee Dong-won, director general of the central bank’s Economic Statistics Department. “The squeeze from the blockade will be reflected in second-quarter data,” Lee said. “It is clear that the conflict in the Middle East has placed upward pressure on inflation and downward pressure on economic growth.” Diplomatic efforts to resolve the crisis have stalled, with ceasefire negotiations failing to produce a breakthrough. The deadlock may partly reflect both sides’ need to replenish depleted military stockpiles. According to the Center for Strategic and International Studies (CSIS), U.S. inventories of precision-strike missiles and Tomahawk cruise missiles have fallen to 60 percent and 70 percent of peacetime levels, respectively. Inventories of the Terminal High Altitude Area Defense (THAAD) system, in particular, have been halved. Iran’s offensive capabilities also remain constrained after the destruction of key launch facilities and infrastructure. “With both sides facing mounting pressure from a war of attrition, they appear to be seeking a tactical breathing space through negotiations,” said Kim Yeol-soo, a senior research fellow at the Korea Institute for Military Affairs. Iran remains deeply skeptical of U.S. intentions after being attacked during previous nuclear talks, while Washington has refused Tehran’s demands for the restoration of frozen assets and formal recognition of uranium enrichment. High-stakes negotiations ended on April 12 without tangible results. Tensions continue in the Strait of Hormuz, with both sides seizing vessels and raising the risk of renewed military action once arsenals are replenished. The international financial community has taken note of South Korea’s performance. After the 1.7 percent first-quarter growth figure, major investment banks began raising their annual growth forecasts. Park Jeong-woo, an economist at Nomura Securities, cautioned that the upgrades remain conditional. “It is premature to conclude that inflationary pressures or downside risks to growth have subsided,” he said. The most immediate threat is a sustained surge in energy costs. Dubai crude, which averaged below $70 per barrel last year, has stayed above $90 this year. Hyundai Research Institute and other institutions warn that if the annual average oil price exceeds $100, South Korea’s consumer price index could rise by more than one percentage point, pushing inflation into the 3 percent range. Inflationary pressure is already showing in the currency market. The Korean won, which had briefly stabilized, weakened again toward the end of the week, closing at 1,484.5 per dollar on Friday. Korean government bonds, once expected to strengthen after their inclusion in the World Government Bond Index, have also weakened. As of Friday morning, the three-year yield rose 3.8 basis points to 3.496 percent, while the 10-year yield climbed 2.6 basis point to 3.817 percent, marking a level of weakness similar to late March. 2026-04-24 16:54:54
  • Chips carry Koreas Q1, but Gulf fallout looms large
    Chips carry Korea's Q1, but Gulf fallout looms large SEOUL, April 23 (AJP) — From the headline, South Korea’s economy looks robust — gross domestic product posting its strongest growth in more than five years while chipmakers log staggering margins nearing 70 percent. But beneath the surface, the expansion is widely seen peaking, exposing structural fault lines from overreliance on a single sector and mounting inflationary pressure. According to the Bank of Korea on Thursday, the nation’s GDP grew 1.7 percent from the previous quarter, the fastest pace since the third quarter of 2020. Yet the strength fades on closer inspection. The recovery remains heavily skewed toward semiconductors, underscoring a deepening K-shaped divergence within the economy. Exports contributed 1.1 percentage points — more than 60 percent of total growth — with chips alone accounting for roughly 55 percent of that figure. Without the semiconductor boom, growth would likely have stayed below 1 percent, the central bank acknowledged. Corporate earnings tell a similar story of concentration. Samsung Electronics posted 57.2 trillion won ($38.65 billion) in operating profit, while SK hynix logged 37.6 trillion won. Together, the two accounted for 66.5 percent of the 142 trillion won total operating profit expected from KOSPI-listed firms — more than doubling their share from about 26.7 percent a year earlier. The dominance is increasingly reflected in financial markets. The combined market capitalization of the two firms has surged from around 30 percent of the KOSPI early last year to 41.1 percent as of Thursday. As market movements hinge more heavily on these stocks, volatility has intensified, with the KOSPI Volatility Index more than doubling from 22 a year ago to 53. Few are willing to contemplate the downside should the chip cycle turn. Behind the headline strength, policymakers are bracing for a second-quarter inflection as the delayed impact of the Strait of Hormuz disruption begins to feed through the economy. “The impact remained minimal through the first quarter as vessels that passed through the strait before the closure arrived in Korea by late March,” said Lee Dong-won, director general of economic statistics at the Bank of Korea. “The squeeze from the blockade will be reflected in second-quarter data,” he said. “It is clear that the conflict in the Middle East has placed upward pressure on inflation and downward pressure on economic growth.” This adverse mix — rising inflation alongside slowing growth — dominated discussions at the first policy meeting between Finance Minister Koo Yun-cheol and new Bank of Korea Governor Shin Hyun-song on Thursday. The central bank has already signaled it will revise its inflation outlook closer to 3 percent this year while lowering its growth forecast from around 2 percent. Energy prices are already feeding through to the real economy. As of April 22, gasoline prices in Seoul averaged 2,041 won per liter, up 16.7 percent from 1,749.6 won at the onset of the conflict. Diesel prices, critical for logistics, climbed 21.9 percent to 2,028 won. The ripple effects are spreading across transport and trade. Korean Air’s fuel surcharge on the Incheon–Los Angeles route will jump 80.1 percent to 501,000 won starting May 1, reflecting disruptions in jet fuel supply — a key export for Korean refiners. Shipping costs are also surging. The Shanghai Containerized Freight Index (SCFI) has risen 41.5 percent from 1,333 in late February to 1,886 as of April 17, with some routes seeing freight rates increase severalfold depending on cargo and destination. Consumer sentiment is already deteriorating. The Bank of Korea said the Composite Consumer Sentiment Index fell 7.8 points in April to 99.2, slipping below its long-term average for the first time in a year — the sharpest drop since December 2024. Nearly 90 percent of households cited rising petroleum prices as their primary concern, more than 2.5 times the share worried about industrial goods. Bond yields moved in the opposite direction of the chip-blinded stock market. Both the three-year and 10-year government bond yields added around 9 basis points respectively to 3.453 percent and 3.787 percent by midday Thursday, whereas the Kospi finished a new historic high. The Korean won remains under sustained pressure. The currency has weakened about 9 percent from 1,367 per dollar in June 2025 to around 1,480 this month — a far steeper decline than the 1–2 percent depreciation seen in the Japanese yen and Chinese yuan over the same period. As external shocks begin to collide with domestic imbalances, the question is no longer how strong the first quarter was — but how quickly the momentum will unravel in the quarters ahead. 2026-04-23 16:43:51
  • UPDATE: Koreas Q1 GDP strongest in more than five years on hot chip demand
    UPDATE: Korea's Q1 GDP strongest in more than five years on hot chip demand *Updated with additional information and market response SEOUL, April 23 (AJP) — South Korea’s economy grew at the fastest pace in more than five years in the first quarter, rebounding sharply from a contraction in the previous three-month period, as feverish demand for semiconductors powering the artificial intelligence boom fueled exports and investment. According to the Bank of Korea, gross domestic product expanded 1.7 percent on quarter in the January–March period, marking the strongest growth since a 2.2 percent gain in the third quarter of 2020. The rebound follows a 0.3 percent contraction in the fourth quarter of last year, when a slump in construction investment weighed on overall activity. The KOSPI heavily led by chip stocks hit new heights, climbing above 6,500 mark by gaining 1.7 percent upon opening thanks to stronger-than-expected growth data and SK hynix earnings report. The Korean won also strengthened, with the dollar at 1,478.20, down 1.3 from overnight. Exports surged 5.1 percent on quarter, led by semiconductors and IT products, as global demand for high-performance memory chips used in AI servers and data centers remained robust. Semiconductor exports have been soaring at triple-digit rates in recent months amid the AI investment boom, underscoring their role as the economy’s main growth engine. Facility investment rose 4.8 percent as companies ramped up spending on machinery and transportation equipment to expand production capacity, particularly in chipmaking and related industries. Construction investment, long a drag on growth, also showed signs of recovery, rising 2.8 percent on quarter, supported by base effects and a modest pickup in both building construction and civil engineering projects. A broad upward trend was also observed across various sectors. Manufacturing GDP, the backbone of the Korean economy, climbed 3.9 percent, on brisk activity on the assembly lines for computers, electronics, and optical instruments. This marks the first time the manufacturing sector has surpassed the 3 percent growth threshold since the first quarter of 2022, aided by the semiconductor boom and a base effect following a 1.5 percent decline in the previous quarter. Construction GDP also rose 3.9 percent, ending a period of stagnation or decline. It is the first time since the first quarter of 2024 that the construction sector has recorded a growth rate above 1 percent. The agriculture, forestry, and fisheries sector increased 4.1 percent, led by crop production, marking two consecutive quarters of growth. The domestic demand, however, remained fragile. The services sector added 0.4 percent and private consumption 0.5 percent. Real gross domestic income (GDI), which reflects actual purchasing power by factoring in terms of trade, recorded a steep 7.5 percent jump - the largest increase in 38 years, since the 8 percent rise seen in the first quarter of 1988. The surge is attributed to a significant improvement in the terms of trade, as export prices and volumes spiked by 28.7 percent and 23 percent in March - also driven by chips. 2026-04-23 08:09:19
  • Koreas consumer confidence turns negative from energy concerns
    Korea's consumer confidence turns negative from energy concerns SEOUL, April 23 (AJP) -South Korea's consumer confidence turned negative for the first time in a year, weighed down by worries over supply-side repercussions on inflation and economic performance from a Gulf-triggered energy shock, data showed Thursday. According to the Bank of Korea (BOK), the consumer sentiment index for April dipped 7.8 points to 99.2, the first time below the 100 threshold in a year. A reading below 100 indicates pessimism outweighs optimism compared with the long-term average. The monthly fall is the steepest since December 2024 amid the shock from a brief martial-law declaration. The drop was broad-based, reflecting a sharp deterioration in both household finances and perceptions of the broader economy. Sub-indices tracking household conditions all weakened. The index for current living standards fell 3 points to 91, while expectations for future living conditions dropped 5 points to 92. Outlooks for household income and spending also declined, each falling 3 points to 98 and 108, respectively. Perceptions of the economy turned decisively dimmer. The index measuring current economic conditions plunged 18 points to 68, while the outlook for future conditions dropped 10 points to 79. Job prospects also deteriorated, with the employment outlook index down 7 points to 82. The data underscore how external shocks are increasingly feeding into domestic sentiment, as households brace for a combination of rising costs and slowing growth. Inflation concerns intensified. The expected inflation rate for the coming year rose to 2.9 percent, up 0.2 percentage point from the previous month, with the anticipation for price rise spiked 4 points to 153 whereas that for income stayed stagnated at 120 to suggest bias for tightening in spending. Consumers pointed overwhelmingly to energy-linked costs as the main driver of price pressures. Petroleum products were cited by 88.8 percent of respondents as the key factor influencing inflation expectations, followed by industrial goods at 33.1 percent and public utilities at 31.4 percent. The surge in energy-related concerns comes amid heightened volatility in global oil markets following disruptions in the Middle East, reinforcing fears of cost-push inflation rippling through the economy. Interest rate expectations also moved higher, with the index climbing 6 points to 115, reflecting growing anticipation that borrowing costs could remain elevated or rise further. The April survey was conducted from April 9 to 16 among 2,262 households nationwide. 2026-04-23 07:36:42
  • Polarization deepens as two chip giants dominate KOSPI
    Polarization deepens as two chip giants dominate KOSPI SEOUL, April 22 (AJP) -South Korea's main bourse is flying to new heights and exports remain resilient despite Gulf shocks, but the momentum is increasingly powered by a single engine — chips. Memory giants Samsung Electronics and SK hynix now account for about 67 percent, or 137.3 trillion won ($XX billion), of total first-quarter operating profits among South Korean companies, according to financial data provider FnGuide. That is more than double last year’s share, when the two firms contributed less than 30 percent of the total. Samsung Electronics alone posted more than 57 trillion won in operating profit for the first quarter, surpassing the combined total of all KOSPI-listed companies during the same period last year. SK hynix, a pure-play memory chipmaker, is also on track for outsized results, with its first-quarter operating profit expected to exceed 40 trillion won in its earnings report due Thursday — nearing its full-year earnings level. Their stellar performances are attributed to both companies securing strong positions in the semiconductor market while achieving sustained growth in high-value chips such as high-bandwidth memory (HBM), used in artificial intelligence (AI)-related infrastructure. The outlook for other major players, however, remains bleak. Hyundai Motor Company, despite steady sales, is expected to see its first-quarter operating profit decline by more than 1 trillion won year-on-year, partly due to a 15 percent reciprocal tariff in the North American market. LG Energy Solution is also projected to remain in the red following the termination of contracts with Ford Motor Company and Freudenberg Battery Power Systems. This imbalance has fueled a rally in the stock market. On Wednesday, the benchmark KOSPI closed at 6,417.93, up 0.46 percent, hitting an all-time high for the second consecutive day. However, the gains have been largely concentrated in the two tech giants. According to the Korea Exchange, as of Wednesday, the combined market capitalization of Samsung Electronics and SK hynix reached approximately 2,140 trillion won. This represents 41 percent of the total KOSPI market cap of 5,200 trillion won ($3.5 trillion). A year earlier, the two companies' combined market cap stood at 1,350 trillion won or around 30 percent of the total. The most significant risk factor is the surge in debt-leveraged trading. According to the Korea Financial Investment Association, the outstanding balance of margin loans reached 34.7 trillion won as of Tuesday, marking another all-time high. The figure has been on a steady upward trajectory since surpassing 30 trillion won on Jan. 29. In response to rising volatility, brokerages have raised margin requirements and banned new transactions in contracts for difference (CFDs) - derivative products that allow investors to settle price differences in cash without owning the underlying asset. Despite these measures, implementation for Samsung Electronics and SK hynix has been slower than for other stocks, raising questions about their effectiveness. Non-bank lending is also increasing. Card loan balances reached nearly 43 trillion won in the first quarter, another record high. Data submitted by the Financial Supervisory Service to the office of Lee Hun-seung of the People Power Party shows that new card loan issuance to high-credit borrowers - those with scores above 800 - exceeded 3 trillion won in the fourth quarter. High-credit borrowers are increasingly turning to high-interest card loans, which can carry rates of around 15 percent, to fund real estate and stock investments, the FSS said. The trend is driven by tighter mortgage lending at commercial banks and efforts to capitalize on the surging KOSPI. While household financial assets have grown significantly from 960 trillion won in 2024 to 1,430 trillion won last year, the KOSPI's volatility remains a concern, as a growing number of investors may struggle to repay their debts. When the KOSPI plunged more than 12 percent on March 4 following the blockade of the Strait of Hormuz, the ratio of forced liquidations to outstanding credit reached 6.5 percent - the highest level since the market shock during the early stages of the coronavirus pandemic in March 2020. 2026-04-22 17:34:19