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What next for Korea?

The longer the political crisis in Korea drags on, the worse the economic consequences will be. Consumer spending is likely to be affected and there will also be disruption if the country’s powerful trade unions press ahead with their threats of mass industrial action. Pressure is likely to grow on the central bank to cut interest rates. The political turmoil makes us more confident in our view that the Bank of Korea will cut rates at its next meeting in January.

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