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U.S. economy likely to avert hard landing: BOK report

August 23, 2024

The U.S. economy is unlikely to face a hard landing as the world’s largest economy is maintaining decent growth momentum, a report from the Bank of Korea (BOK) showed Friday.

In its latest report, the central bank said the U.S.’ labor market is in the process of searching for an equilibrium and the chances are slim for the U.S. economy to cool sharply in the short term.

“In the face of high market rates and inflation, the U.S. economy will slow down going forward, led by a slowdown in domestic demand,” the report said.

“But an expanded investment in the artificial intelligence sector, coupled with a continued inflow of immigrants, will help the economy maintain a stable growth without a sharp slowdown,” it added.

For the year, the U.S. economy is expected to grow 2.4 percent, according to the BOK.

The report said despite a slowdown in the U.S. economy, demand for South Korean autos and machinery is unlikely to be hit.

The report said a chasm in demand for electric vehicles and the uncertainties following the U.S. presidential election may pose a greater risk to South Korean companies.