Kai Fu Macro: South Korean economy expected to resume growth in the first quarter of the year.

Gareth Leather, Senior Asia Economist at Capital Economics, said that after a contraction in the previous quarter, the South Korean economy is expected to return to growth in the first quarter. In a report, Leather wrote that the expected recovery may be weak, as strong exports could be offset by weak domestic demand. He added that although the Bank of Korea hinted last week that its easing cycle may come to an end, the central bank may still cut interest rates twice this year to address potential ongoing weak growth. Capital Economics maintains its forecast of 2.0% growth for the South Korean economy in 2026, and expects the economy to grow by 1.0% in 2025.