[Jeju Weekly] Panic in South Korea

Deflationary crisis arising from plummeting investment and foreign 

demand; How will South Korea respond?

Yeouido is abuzz with a new panic, fueled by the wider Asian Crisis. With mass asset sell-offs and 

plummeting investment in the past few weeks, fears of a recession have set in Korean markets. The 

KOSPI is down 22% over the past 3 months in a historic drop, as inflation rates are widely expected to 

continue their steep decline. 


In response, the Korean government's GDP growth estimate has fallen to -1.5% without any signs of 

recovery, stoking predictions of recession. Korea’s debt-to-GDP has skyrocketed, and unemployment is 

now a staggering 8%. In recent months, President Kim Young-sam’s government has come under immense 

public scrutiny for its economic policies; some experts fear severe political unrest may be brewing.

Location: Seoul, South Korea

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