International | Jun 08 2006
Although the Bank of Korea is maintaining its "generally hawkish" policy stance, Alliance Bernstein strategist Anthony Chan feel South Korean growth is likely to peak this year.
This view is supported by "softer than anticipated" April production and domestic demand data, Chan says.
This now puts Alliance Bernstein’s 5% GDP growth forecast in a position of downside risk, he adds, with production activity seen as peaking, output seems to be decelerating and consumption is also moderating.
Furthermore, with South Korea’s external balance deteriorating further in April, the strategist says it reinforces his view that fundamentals underpinning the KRW/USD exchange rate are weakening.
By Terry Hughes
