Things don't look too good for the South Korean economy. The government revised down its growth outlook for 2019, citing weak exports and sluggish investment. While U.S.-China trade tensions have waned for now, Japan's recent decision to restrict exports of key materials to South Korea has emerged as another threat.
Today we take an in-depth look into prospects of the Korean economy in the latter half of this year.
And for that, Professor Shin Sang-hyup from Kyung Hee University joins me in the studio today.
Welcome to the program.
The government has slashed the country's growth forecast for 2019 to between 2.4 percent and 2.5 percent. That's down from a previous forecast of between 2.6 percent and 2.7 percent.
Did you see this downward revision coming and what does this mean for the Korean economy?
The government laid out measures earlier today to breathe new life into the economy. Now, the key part of the plan is to offer tax incentives to spur investment to boost domestic consumption as well as job growth.
What is your assessment of the government's plans? Was there anything else that stood out?
Another issue adding to woes is Japan's recent decision to restrict exports of three key materials used in semiconductor and display productions -- which is set to take effect tomorrow. There are also reports that Japan is also considering removing South Korea from its list of so-called "white countries" -- which face minimal trade restrictions.
Do you think there's a reason they are targeting these specific products?
How much damage do you expect this move to have on South Korea's industries?
There are reports that the latest action will also hurt Japanese companies, as South Korea is one of their biggest clients. How do you see it?
The Korean government has began a review of the legal grounds for filing a complaint to the World Trade Organization. If and when that happens, what are the chances the ruling will favor Seoul?
But we must note, it's a very long procedure and some are questioning its efficacy. With Japan's media reporting that Tokyo is considering adding more products to the export restriction list, do you see any other way for Seoul to counter this?
Separately, the Korean government said it plans to invest about five billion U.S. dollars to develop home-grown, high-tech materials to ease the nation's dependency on Japanese firms. What did you make of this announcement -- and is it enough?
Shifting gears. Uncertainties linger for the Korean economy in the second half of the year. What are the prospects and what are some of the variables that could have a bearing on the economy?
It appears for now that the U.S.-China trade talks are back on track. What do you think will be some key sticking points during their negotiations going forward?
Thank you for your insights.