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Why did Korean domestic demand slow down after the Asian financial crisis?

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Title Why did Korean domestic demand slow down after the Asian financial crisis?
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Material Type Reports
Author(English)

Whang, Unjung et al.

Publisher

Sejong:Korea Institute for International Economic Policy

Date 2015-12
Series Title; No Policy Analysis / 15-01
ISBN 978-89-322-1615-7; 978-89-322-1088-9
Pages 97
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < General
Economy < Economic Conditions
Holding KIEP: KDI School

Abstract

Economic growth in Korea has slowed down dramatically after the Asian financial crisis of 1997. The average growth rate of real GDP of Korea before the crisis (1981-1996) was 9.3%, while it was reduced to 3.7% during the period (2003-2014) after the credit card lending boom following the financial crisis. Coincidently, the patterns of domestic demand growth before and after the crisis were similar to the GDP growth: the average growth rate of Korean real domestic demand was 8.8% and -0.3%, in the respective periods. This remarkable decline in both growth rates should not be attributed to the factors that are linked to the short-run economic fluctuations because these phenomena have lasted more then 10 years after the Asian financial crisis. Instead, structural factors related to the domestic market or exports are more likely to induce the significant declines in the growth of these two variables. (The rest omitted)