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S. Korean economy to grow 3.2% in 2022: think tank

(Yonhap)
(Yonhap)
South Korea’s economy will grow by 3.2 percent next year on consumer spending and strong exports, with pandemic restrictions expected to have eased, a local think tank said Wednesday. The benchmark Kospi will also continue its growth momentum and hit a record high, it added.

“We will see a clear surge in consumer spending early next year as the coronavirus curbs are eased. … Exports will be strong, propped up by a global economic recovery,” said Jang Geun-hyuk, a senior research fellow at the Korea Capital Market Institute.

Jang said the benchmark Kospi could reach as high as 3,350 points next year, as the US brings inflation under control and keeps interest rates steady while supply chain woes ease.

The main index, which surpassed 3,300 points for the first time on July 6, amid bets on key exports like semiconductors, now trades in a narrow range around 3,000.

But the local stock market could take a hit if the US Fed tightens its monetary policy to tame rising prices or supply shortages worsen, Jang said, adding that South Korea will also have to mull a rate hike to fight inflation and prevent capital outflows caused by the US tapering.

Meanwhile, the Korea Exchange noted the record-breaking run for stock market flotations, with initial public offerings totaling 17 trillion won ($14.3 billion) this year, eclipsing the 2010 record of 8.8 trillion won.

The market capitalization of those firms listed on the Kospi this year amounts to 87 trillion won, more than twice the 36 trillion won in 2010. Twenty new firms are trading on the benchmark this year, while three companies expect to start trading next month.

Five companies listed this year -- Krafton, KakaoBank, SK IE Technology, Kakao Pay and SK bioscience -- are among the top 10 biggest IPOs ever here, according to the bourse operator. Korea came in seventh in the global IPO ranking in terms of valuations, it added.

By Choi Si-young (siyoungchoi@heraldcorp.com)
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