Export Strength Endures, but Trade Tensions and Geopolitical Risks Cast Shadow
South Korea’s economy, driven by exports, shows continued strength but faces escalating risks from global trade disputes and geopolitical uncertainties in the year ahead, experts stated at an event hosted by the French-Korean Chamber of Commerce and Industry (FKCCI) on Thursday.
The FKCCI’s Economic Forecast 2026, a prominent business luncheon, centered on South Korea’s economic outlook, global macroeconomic trends, and the evolving trade and geopolitical landscape impacting businesses operating within and in collaboration with Korea.
FKCCI Chairman David-Pierre Jalicon commenced the event by highlighting Korea’s resilience. Jalicon, also CEO of D.P.J. & Partners Architecture, emphasized the nation’s ability to weather recurring crises.
“I have observed that Korea excels in times of crisis,” he stated. “The Korean economy has consistently demonstrated remarkable resilience.”
He noted that despite political instability in the past year, Korea attracted $36.5 billion in foreign investment. “Notably, France was the third-largest investing nation in Korea, with $3.8 billion,” he added.
Jalicon mentioned that French President Emmanuel Macron is scheduled for a state visit to Korea in April, marking his first visit since assuming office in 2017.
“Various topics will be addressed during the visit, but we are particularly focused on the economic agenda,” he said, adding that the FKCCI is planning a business forum in conjunction with the visit.
The opening remarks were followed by a welcome address from the Gyeonggi Free Economic Zone Authority, a co-host of the event.
“Our key advantage lies in our strategic location,” said Lee Moon-kyo, director of investment promotion, expressing optimism for enhanced collaboration with participating companies.
The session then transitioned to economic outlook presentations.
“The structure of the Korean economy is significantly export-oriented and less dependent on domestic investment or consumer spending,” said Raphael Lee, deputy head of the economic department at the French Embassy.
“It is quite notable that consumption’s contribution can fluctuate between negative and positive, whereas in the US and many developed economies, consumption is the primary driver of growth,” he added.
Lee stated that exports have remained strong, supported by semiconductors, automobiles, and shipbuilding, but cautioned about increasing risks, including US-China trade tensions and the current semiconductor boom being fueled more by price increases than volume growth.
Yoon Jee-ho, senior economist for South Korea and Taiwan at BNP Paribas, suggested that geopolitical tensions, especially in the Middle East, could affect Korea’s economic prospects.
“For this year, we anticipate GDP growth of 2.3 percent and consumer price inflation of approximately 2.2 percent,” he said. “However, the Middle East conflict could pose downside risks to growth while exerting upward pressure on inflation.”
Roh Keon-ki, former deputy minister for trade negotiations at the Industry Ministry, emphasized “strategic indispensability” as a critical capability in an increasingly fragmented global trade environment.
“Be like Korean chipmakers,” he advised. “Make yourself so essential that no one can impose tariffs on you or challenge your position.”
“With the Middle East in crisis, evolving US policies, and climate change, it might seem overwhelming,” Roh added. “But for those in the Korea-France business community, this can also be an opportunity to lead.”
The event concluded with a panel discussion among the speakers, moderated by Lee Jang-hyuk, professor at Korea University Business School and CEO of AligoAI.
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