16 April marks one year since the Sewol ferry disaster in South Korea. In Q1-2014 - prior to the Sewol accident - the Korean economy expanded 3.9% y/y and the outlook was upbeat, with annual growth forecast above 3.8%.
Sentiment was depressed after the ferry incident, however, and 2014 growth came in below expectations at 3.3%. Both the government and the Bank of Korea (BoK) attempted to revitalize growth momentum by introducing stimulus packages and cutting rates.
"The economic momentum is yet to pick up. Recovery in the housing market and private consumption remains mild and lacks momentum. We expect further support from the government and the BoK to overcome the slowdown caused by the Sewol ferry disaster", says Standard Chartered.
