A soggy outlook in the shipyards

HOW best to prop up the companies that power South Korea’s export-driven economy as the rest of the world slows? The government’s previous answer, the so-called “one-shot” bill, aims to help the worst-affected industries to restructure by offering tax breaks for firms that sell subsidiaries and by reducing the red tape around mergers. Parliament approved it in February; it will come into effect in August. But Park Geun-hye, South Korea’s president, thinks more is needed. On June 28th she proposed a stimulus of 20 trillion won ($17 billion).

South Korea’s exports have fallen every month year-on-year since January 2015. In early June the central bank trimmed its benchmark interest rate by 0.25 percentage points, taking it to an all-time low of 1.25%. Nonetheless the government this week revised down its forecast of GDP growth this year from 3.1%, which it predicted in December, to 2.8%. Ms Park said that the economic situation inside and outside the country was “more serious than ever”.

Britain’s recent decision to leave the European Union, South Korea’s...Continue reading