World Economy

South Korea Recovering, But Doubts Persist

S. Korea’s GDP grew 1.4% in the third quarter.S. Korea’s GDP grew 1.4% in the third quarter.

Multiple signs are surfacing that the South Korean economy is on a path for recovery, but the question still remains: Is the economy really getting better so that the general public can feel the difference?

The Bank of Korea announced Friday that consumer sentiment improved in October, for the first time in three months. The composite consumer sentiment index for October stood at 109.2, up 1.5 points from the previous month, the BOK said, citing its survey of 2,020 households across the nation. A reading above 100 means optimists outnumber pessimists, Yonhap reported.

The index plummeted in August and September, as geopolitical tension in Northeast Asia rose amid North Korea’s intercontinental ballistic missile tests and its nuclear program.

The BoK attributed the rebound to eased tensions between North Korea and the United States after the Chuseok holiday in the first of week this month. The central bank also said people’s sentiment about the economy has improved in general.

A day earlier to the announcement, the central bank also said the country’s gross domestic product grew 1.4% in the third quarter from three months earlier, giving more confidence to the BoK’s growth forecast of 3% for this year.

Moody’s also released a report strengthening the optimism about the Korean economy. Senior Credit Officer Steffen Dyck said in a statement that the credit rating house expects Korea’s real GDP will grow 3% this year and 2.8% next year.

“Korea’s credit profile is supported by very high economic strength, given a diversified and competitive economy, with robust growth potential—around 3% over the next five years—and high income levels,” Dyck said.

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