Economists See Signs Of Upswing On South Korea’s Domestic Economy Despite Sluggish Growth Of The Country’s Exports

by Czarelli Tuason / Oct 25, 2015 11:00 PM EDT

South Korea's Black Friday sale attracted multiple consumers, showing improvement in the country's economy post MERS outbreak. (Photo by Chung Sung Jun/Getty Images)

South Korea may be experiencing a good turn of events on their domestic economy after months of being on a downward spiral following the Middle East Respiratory Syndrome (MERS) outbreak in May and the sluggish economic growth of China, their biggest trade partner, in 25 years, reported Bloomberg Oct. 12.

Economists are observing an improvement in local businesses and consumer confidence as the Korea Black Friday event attracted a large number of consumers with their tax cuts and huge discounts on nearly 27,000 shops across South Korea.

Investors are also starting to gain back their interest on the South Korean market as shares in the country's tech giant, Samsung Electronics Co., took the biggest leap in over six years on Oct. 7 following an 80 percent increase in earnings in the September quarter of 2015.

"Korea's domestic economy appears to be getting back on its feet," observed Krystal Tan, Asia economist at Capital Economics Ltd. "Exports remain a weak spot, but even there, some signs of improvement have emerged."

The KBS World Radio also reported Oct. 11 that private economic think tank Hyundai Research Institute (HRI) forecast a 2.5 percent increase in South Korean economic growth this year and a 2.8 percent increase in 2016.

HRI also predicted a 2.1 percent increase in the private consumption of the country next year and a 3.4 percent increase in construction investments. Meanwhile, the firm is expecting exports to increase by 3.9 percent in 2016, while imports gain 3.4 percent.

According to Cihan on Oct. 6, the mining and manufacturing sectors of South Korea have observed a 0.3 percent increase in August, while retail sales increased by 1.8 percent.

The Consumer Sentiment Index (CSI), which measures the perspective of the market on the economic conditions, moved up one point to 103 in September. A reading of more than 100 points implies a larger number of optimists over pessimists, which signifies a great deal of hope for South Korea's recovering economy.