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The economy of South Korea was contracted in the first quarter, political disorders reaching the feeling of consumers in the fourth Asian economy, while commercial concerns have developed on President Donald Trump's prices on exports to the United States.
South Korean GDP fell 0.2% over the quarter in the first three months of this year, according to data published by the Korean Bank of the Hours before senior ministers should launch commercial discussions with the Trump administration on Thursday. The economy contracted 0.1% compared to the previous year.
The contraction of GDP came while concerns intensified during the first quarter on American prices and the taxation of the Trump administration in mid-March of a right of 25% on steel imports from South Korea.
Data has shown that domestic consumption has dropped by 0.1% during the quarter while consumers have reduced spending in the midst of a political crisis triggered by the short attempt by President Yoon Suk Yeol to impose martial law in December. Yoon was licensed of his duties this monthForcing a new presidential election scheduled for June 3.
The growth prospects of South Korea have decreased since Trump this month imposed 25% tariffs on cars and car parts, which represents around a third of Korea exports together to the United States.
The Minister of Finance Choi Sang-Mok and the Minister of Industry Ahn Duk-Geun were to meet their American counterparts in Washington on Thursday for negotiations on the prices. Ahn said he would seek to achieve a quick agreement on lifting or reducing car tasks.
The acting president Han Duck-SOO told Financial Times last week that South Korea “Do not retaliate” Against Trump's prices, citing the country's historic debt to Washington.
Han said that Seoul would rather seek “solutions that are more winning for both”.
South Korean customs data published on Monday suggested that American tasks already had an impact, with exports down 5.2% compared to the previous year in the first 20 days of April. Expeditions linked to the United States fell 14.3% and those in China at 3.4%.
In addition to tasks on cars, the United States has introduced coverage of 10% prices on imports from South Korea.
The government is preparing an additional WONT12TN budget ($ 8.4 billion) to deal with the prices, but economists said it would not be enough to fully complete the blow.
The Korean bank, which held its basic interest rate unchanged at 2.75% last week, suggested that it would reduce rates in the next quarters to support slow growth.
