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[Bloomberg Business] South Korea’s Prozac Moment

July 16, 2015
South Korean President Park Geun-hye.

South Korean President Park Geun-hye.

[BLOOMBERG BUSINESS] —  If countries have moods, South Korea may be in need of some Prozac.

This is a nation, one of Asia’s great postwar growth stories, that’s home to world-class technology, auto and shipping companies and an industrious and well-educated workforce. Yet, at the moment, South Korea’s top officials are wallowing in economic gloom.

South Korean President Park Geun Hye recently announced that the Greek debt crisis would hurt the domestic economy for “some time.” Finance Minister Choi Kyung Hwan on Thursday warned of falling domestic demand as well as other risks such as rising U.S. interest rates and cheap oil. Not to be outdone, the central bank has weighed in with forecasts of more pain linked to a domestic drought and potential risks from China’s stocks crash.

The population is aging, labor markets are rigid, innovation is lagging, corporate and household debt is rising and confidence has been hit hard by the threat from an outbreak of Middle East Respiratory Syndrome, or MERS. All this only a year after a ferry disaster that killed more than 300 people hammered confidence. [READ MORE]