EclectEcon

Korea’s unique position as a major exporter to both the U.S. and China and a major importer of oil mean that all of the big forces acting on the world economy are hitting it head-on. This has been true for past fluctuations in the world economy, too. During the global slowdown of 1997-99, Korea was naturally one of the leaders, since the Asian crisis was a key ingredient of the downshift. Similarly, Korea’s recovery in 1999-2000 preceded global recovery by a couple of quarters. But Korea’s slowdown in 2000-01 also preceded the global moderation, and its recovery in 2002-03 was also a leading indicator for the world. Accordingly, its new slowdown is very likely a harbinger of slower growth at the global level, once again.