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S. Korea faces growing short-term risks to financial system: poll

All Headlines 12:00 May 21, 2019

SEOUL, May 21 (Yonhap) -- Long-term risks to South Korea's financial system may have been greatly reduced over the past six months, but the country faces growing short-term risks stemming from the trade dispute between the world's two largest economies, a central bank poll showed Tuesday.

The U.S.-China trade dispute topped the list of possible risks to the country's financial system in the recent poll conducted by the Bank of Korea (BOK), with 67 percent of 96 local experts surveyed citing the issue as the most serious problem.

The trade dispute is already seen as affecting Asia's fourth-largest economy as the United States and China make up the world's two largest importers of South Korean goods.

Seoul's outbound shipments have dropped for five consecutive months as of April, when its exports to China also dipped for a sixth consecutive month.

The experts surveyed said the trade dispute will likely have a short-term impact on the local economy, although its impact may be more severe than that of possible problems stemming from household debt that already sits at a record high.

Half of the respondents said their confidence in the country's financial system was either high or very high, up from 37 percent registered in the last poll in November, according to BOK.

Other possible threats to the financial system cited by the experts included uncertainties in the real estate market and dwindling exports, while the country's slowing economic growth was the second most frequently cited risk.

South Korea's economy is estimated to have contracted 0.3 percent in the first quarter from three months earlier, BOK said earlier.

The central bank slashed its growth outlook for the local economy to 2.5 percent last month from the 2.6 percent projected three months earlier.

bdk@yna.co.kr
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