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Korea Country Risk ReportPublished by: Condor Advisers Inc. Published: Feb. 21, 2007 - 15 Pages Table of ContentsSUMMARY RISK PROFILE MATRIX GEOPOLITICAL RISK
AbstractThe probability of rapprochement between Washington and Pyongyang is extremely remote. Expect the Six-Party talks to be permanently iced by June 2007. This will be followed by further missile and nuclear tests by North Korea and escalating regional military tensions. Mass defections from President Roh’s deeply unpopular Uri Party will greatly increase political instability ahead of the December 2007 presidential election. This will encourage greater social instability, especially if the Roh government agrees to a lopsided Free Trade Agreement with Washington. Geopolitical, political and social instability have greatly weakened private demand over the past two years. Private demand remained very weak in 2006 as evidenced by accelerating deflation. Increasing external and internal instability, combined with sharply slower export growth, will lead to an abrupt economic slowdown in 2007 .Slowing export growth and surging import prices will drive Korea’s current account balance into deficit in 2007. Far more alarming is an expected reversal of short-term foreign capital inflows that will reduce foreign exchange reserves by as much as $80 billion in 2007, leaving the won devalued and the stock market 50 percent lower.Get Full Details About This Report >> |
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