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How big are the risks from Korea’s property downturn?

A sharp rise in Korean interest rates over the past 18 months is leading to a steep downturn in the property market. Encouragingly, the banking sector looks well placed to cope, but the broader economy is unlikely to escape unscathed. The problems in the property sector add to the reasons to think the central bank will start loosening monetary policy soon, most likely at its August meeting.

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