Has the Economy Hit Bottom... Korea's Leading Economic Index Hits Highest in 3 Years and 7 Months

[Financial News]  Korea's leading economic index has risen for seven consecutive months, reaching its highest level in 3 years and 7 months.
The resolution of political uncertainties, the new government's expansionary fiscal policy, and the effect of boosting consumption are combining to strengthen expectations of an 'economic bottom escape'.
According to the Organization for Economic Cooperation and Development (OECD) on the 13th, Korea's leading economic index (CLI) last month was 101.08, the highest level since November 2021 (101.09).
The OECD leading economic index is an indicator that predicts the economic trend 6 to 9 months ahead, with a value above 100 indicating growth above the long-term trend, and below indicating the opposite.
Korea's CLI hovered below 100 for 20 months from July 2022, then exceeded 100 last February, showing a gradual recovery. After declining again from August to November last year, it has been rising continuously since December of the same year.
As of last month, Korea's CLI was the second highest among 12 OECD countries, following the UK (101.16). It also surpassed the average of the Group of 20 (G20) countries (100.50) and the Group of 7 (G7) countries (100.51). This is interpreted as a relatively high possibility of future economic expansion in Korea.
Real indicators also support signs of recovery. The Bank of Korea's Consumer Confidence Index (CCSI) rose for three consecutive months from 93.8 in April to 101.8 in May and 108.7 in June. In particular, the consumption coupons worth 31.8 trillion won scheduled to be released through the second supplementary budget are expected to directly stimulate private consumption.
Exports are also holding up well. According to the Ministry of Trade, Industry and Energy, exports increased in February, March, April, and June this year compared to the same months last year. In particular, June's export value was 59.8 billion dollars, the highest ever for June.
The financial market has also caught the recovery mood. The won-dollar exchange rate soared to 1,487.6 won in April but has recently stabilized in the high 1,300 won range. The stock market also saw the KOSPI rise to 3,216.69 on the 11th, breaking through the 3,200 level for the first time in 3 years and 10 months.
Major overseas investment banks (IBs) are also offering positive views on the Korean economy. According to the International Finance Center, the average growth rate forecast for Korea by eight IBs was revised upward from 0.8% at the end of May to 0.9% at the end of June.
However, there are also warnings against premature optimism. U.S. President Donald Trump has announced plans to impose a 25% reciprocal tariff on Korean products starting August 1. If tariff negotiations fail, there is concern that export competitiveness could suffer a significant blow.


spring@fnnews.com Lee Bomi Reporter