(Jungah Lee and Enda Curran – Bloomberg)
South Korea, a bellwether for global trade and technology, cast doubt over hopes for a quick rebound in the world economy by reporting its biggest contraction of gross domestic product in a decade.
Asia’s fourth-largest economy shrank by 0.3 percent in the first quarter from the previous three months, versus estimates for a 0.3 percent gain. That’s a big worry for other manufacturing and technology-driven exporters, including Japan, Germany and Taiwan. A separate report showed global trade volumes are falling at the fastest pace in a decade.
Hot on the heels of the surprise reading from Korea, the Bank of Japan warned of “high uncertainties” in its outlook for growth as it pledged to keep interest rates at rock bottom levels through at least spring of 2020. The BOJ now projects that it won’t hit its 2 percent inflation target at least through March 2022, which will be nine years since Governor Haruhiko Kuroda launched his radical program to reflate prices. Click here to read more.