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Korea Herald
29-05-2025
- Business
- Korea Herald
BOK cuts base rate by 0.25%p amid won's rally
South Korea's central bank delivered a quarter-point cut on Thursday, on the back of the won's recent appreciation. The Bank of Korea cut the base rate by 0.25 percentage point, lowering it to 2.5 percent. With the decision, the gap between Korea's key rate and the US rate has widened from 1.75 percentage points to 2 percentage points. The BOK implemented a rate cut, supported by recent strength in the Korean won against the greenback. While a wider interest rate gap raises concerns over capital outflows and forex market volatility, the won's recent appreciation has mitigated these pressures. With the rate cut, the central bank also slashed the projection for this year's gross domestic product growth from 1.5 percent to 0.8 percent. The BOK's renewed projection is similar to estimates suggested by other institutions. The Korea Development Institute also halved its projection for this year from 1.6 percent to 0.8 percent. The next rate-setting meeting is scheduled for July 10.
Korea Herald
17-05-2025
- Business
- Korea Herald
Buffets are back: Diners seek bang for their buck amid inflation
Once avoided amid the COVID-19 pandemic and changing dining trends, buffet chains are making a comeback as dining costs continue to rise in Korea. Cho Ha-eun, a woman in her 30s, waited in line for over an hour to enter a casual buffet chain in Suwon, Gyeonggi Province, for lunch on a weekend in March. When she arrived around noon, more than 50 groups were waiting outside the restaurant, as it was offering strawberries as part of a seasonal event. 'I expected there would be a wait because of the event, but not for 1 1/2 hours. There were several other locations of the same chain across Suwon (offering the same event),' Cho said. The chain accepts reservations to help people avoid waiting. But Cho added that people often ended up waiting in line there, as weekend slots were usually fully booked. Emerging in Korea around 2000, buffet-style restaurant chains flourished throughout the 2010s, offering a wide variety of dishes at more accessible prices than luxury hotel buffets. The period of growth ended with a sharp decline in the early 2020s. But now, buffet chains are making a comeback. From popular choice to waning appeal A few years ago, dining trends in Korea seemed to be moving away from the buffet approach. As of 2023, one of Korea's top dining trends was 'omakase,' a Japanese-style multi-course meal served in small portions. Unlike buffet chains that offer a wide array of familiar, crowd-pleasing foods, omakase restaurants specialize in high-end, chef-curated experiences. Reservations were often required at least a week in advance, despite prices starting around 150,000 won ($106) per dinner. The preference for this dining style spread beyond Japanese restaurants, giving rise to variations such as beef omakase and coffee omakase. Some see this as part of a broader shift in dining culture — one that values exploring refined and subtle flavors over simply enjoying large quantities of familiar food. 'The omakase style of dining satisfies not only sensory pleasure but also the desire to learn about ingredients,' wrote a big data trend column in a 2023 issue of a magazine published by the Korea Development Institute. The column noted that the trend reflects the values of the times. 'Consumers engage more deeply with their food and gain knowledge that goes beyond simply eating.' While omakase gained popularity, buffet chains faced significant challenges. Already facing declining popularity due to the limited ways they could make their menus stand out and relatively high prices compared to single-dish dining options, buffet chains were further hit by the onset of the COVID-19 pandemic in 2020. Heightened hygiene concerns made diners avers to food being displayed within reach of so many people. The decline was clearly reflected in the shrinking number of locations of Korea's buffet-style restaurant chains — Vips, operated by CJ Foodville, and Ashley, now rebranded as Ashley Queens under E-Land Eats. Vips saw a drop from 112 locations in 2015 to 41 in 2019, and further down after the pandemic to 28 by 2023. Ashley also declined from over 100 locations in 2019 to 55 by 2022. Chains focused on traditional Korean dishes faced even steeper losses. In 2017, Korea's leading dining companies — CJ Foodville, E-Land and Shinsegae — operated 113 locations, but now only two branches of E-Land's Nature Kitchen remain. Resilient comeback amid inflation But recently buffet chains have started to bounce back, even as many omakase businesses have scaled back or closed. Ashley Queens, which offers buffets priced up to 27,900 won, recorded over 40 billion won in sales in 2024 — a 70 percent increase from the previous year. Vips, whose salad bar is priced as high as 47,900 won, also showed signs of recovery, with parent company CJ Foodville reporting a 7.8 percent rise in its dining division sales. The number of their branches has started to grow again, as well. Ashley Queens has doubled its number of locations over the past two years, reaching 111. Vips also added five branches since 2023, increasing from 28 to 33. The warmer sentiment is felt across the industry. According to fintech firm Finda, buffet restaurant revenue in October 2024 rose 28.5 percent year-on-year, far outpacing the overall food service sector's 2.88 percent growth. Riding the wave of renewed interest in buffet-style dining, Korean bakery chain Tous Les Jours, also operated by CJ Foodville, held a bakery buffet event in April at select branches in Seoul, offering a variety of breads for 9,900 won. A branch of the fried chicken franchise BBQ in Bucheon, Gyeonggi Province, also transformed into a buffet, serving its fried chicken menu at 12,900 won. The events went viral online, drawing early lines of eager customers for food that's usually easy to find at their regular outlets. This growing preference for buffet-style restaurants in Korea reflects a broader market trend, where dining out is becoming increasingly expensive. 'When I eat out for pasta and coffee, it costs nearly 30,000 won. But at a buffet, I can enjoy multiple dishes, dessert included, for less than that,' said a Seoul resident in his 30s. He added that the price gap between single-dish meals and buffet admission has narrowed significantly compared to before the COVID-19 pandemic. According to Statistics Korea, dining-out costs in the country have risen by more than 3 percent annually for three consecutive years, increasing by 7.7 percent in 2022, 6 percent in 2023 and 3.1 percent in 2024. Experts also point to heightened economic concerns among Koreans, driven by rising prices and prolonged economic slump, as a key factor behind this shift in dining choices. 'With continued inflation, there is a growing perception that buffet-style restaurants offer better value for money,' said Lee Eun-hee, a consumer science professor at Inha University. 'Omakase is often about consuming an overall experience — not just the food. But consumers now appear to be shifting toward enjoying a broader selection of familiar dishes they personally prefer.' Experts note that the ongoing economic situation could make consumers more cautious about dining out, as they increasingly fear disappointment. In this context, buffet franchises offering a wide range of familiar foods are seen as a safer, more reliable choice. 'People these days would find it more difficult to dine out than they were before, largely due to economic concerns. As a result, they can be more cautious when choosing where to eat,' said Choi Chul, a consumer economics professor at Sookmyung Women's University. 'In particular, for group dining, buffets can be an attractive option. With a diverse selection of food, they can accommodate various taste preferences and reduce the risk of leaving anyone dissatisfied.'
Korea Herald
15-05-2025
- Business
- Korea Herald
[Editorial] Tariff pause, strategic push
A 90-day pause of the US-China tariff fight demands strategy, not complacency, from Korea The US and China — the world's two largest economies — agreed Monday to a 90-day suspension of their escalating tariff war, reducing duties from a punishing 145 percent to 30 percent on US imports from China, and from 125 percent to 10 percent in the reverse direction. While this temporary truce may ease immediate pressure, it offers no resolution. For South Korea, the implications are complex — a brief opening and a sharp warning. South Korea, whose economy is built on export-led growth, is deeply tethered to the economic and geopolitical spheres of both Washington and Beijing. The 90-day pause, which began Wednesday and runs through mid-August, offers a narrow but critical window for Seoul to recalibrate its trade strategy. The goals must be clear: reduce the burdensome 25 percent reciprocal tariffs, and secure exemptions for key export items such as automobiles and steel. This is not a moment to simply ride out the storm. It is a chance to shape a long-term road map for resilience in an increasingly fractured global economy. Despite some initial optimism, the truce does not reflect any fundamental thaw in US-China trade relations. The rollback is modest and highly conditional. Key US tariffs remain in place, and a 'default' 10 percent duty continues to apply across other bilateral agreements, even with allies like Britain and Japan. Such precedents are telling. Under US President Donald Trump's transactional foreign policy, tariff relief is not freely given. It must be earned through visible, often strategic, concessions. Trump's comment on May 9 that the US might offer 'something special' to certain allies makes the stakes plain: Trade exemptions will come only to those who meet Washington's demands. South Korea's task now is to pursue sector-specific relief and push for exemptions or reductions on targeted exports. To build negotiating leverage, Seoul could offer cooperation in key industries such as shipbuilding and energy, as well as alignment with US export controls aimed at China. What complicates the outlook is the country's heavy dependence on trade. Exports accounted for 36.3 percent of gross domestic product last year and are already under strain. In April, shipments to the US dropped 6.8 percent on-year to $10.6 billion, narrowing Korea's trade surplus with Washington by $900 million. In just the first 10 days of May, the decrease widened to a stunning 30.4 percent, driven in part by market uncertainty tied to tariff threats. This is more than a temporary slump. On Wednesday, the state-run Korea Development Institute slashed its 2025 growth outlook from 1.6 percent to a mere 0.8 percent. The downgrade reflects not just the drag of American protectionism but also the country's deeper vulnerability: weak domestic demand that leaves little room for economic maneuver. Compounding the challenge is South Korea's presidential election, set for June 3. The transitional period always carries a degree of political inertia. But this is no time for delay. The incoming administration will need to move quickly to navigate turbulent diplomatic waters and competing domestic priorities with urgency and clarity. Beyond short-term relief, South Korea must look ahead. Investment in critical technology sectors — increasingly exposed to geopolitical tension — is essential. Diversifying trade routes and strengthening regional partnerships, especially through multilateral platforms like APEC, will be vital to weather the storm of rising global protectionism. The 90-day pause in the US-China tariff fight is not a reprieve. It is a countdown. Seoul must seize this opportunity to redefine its trade strategy, assert its economic interests and ensure that when tariffs return — as they likely will — it is ready.
Japan Times
14-05-2025
- Business
- Japan Times
South Korean think tank halves 2025 growth forecast to 0.8%
A South Korean state-funded think tank slashed its outlook for the country's growth this year, reflecting the fallout from U.S. President Donald Trump's tariff campaign on the trade-reliant nation as its presidential race hits full swing. The Korea Development Institute now sees the country's economy growing 0.8% in 2025 after expanding 2% last year, it said in its semiannual economic outlook released on Wednesday. The projection is down from February's forecast of 1.6% and underscores the pressing economic challenges South Korea faces as voters prepare to elect their new leader on June 3. The election is a crucial step in putting the export powerhouse back on track after ex-President Yoon Suk Yeol's short-lived martial law decree in December unleashed the country's worst political crisis in decades. Shoring up growth will be a key task for Yoon's successor. Democratic Party candidate Lee Jae-myung, who's leading in polls, and chief rival Kim Moon-soo of the People Power Party have been trying to persuade voters that they are the right person to deal with the global trade war. A recent poll showed Lee leading with 49.5% support, followed by Kim with 38.2% and Lee Jun-seok of the conservative Reform Party at 5.7%. During a televised debate with his party rivals last month, Lee Jae-myung singled out trade negotiations with the U.S. as the most pressing task to tackle in his first 100 days in office, if elected, explaining that his team was already making preparations so he could get to work swiftly to resolve the issue. PPP's Kim has said he will revive the economy by supporting companies. South Korea's economy contracted in the first quarter, demonstrating the fragile state of business activity even before exporters absorbed the full force of Trump's new duties, and raising fears over the potential for further damage in the region. South Korea, a key U.S. ally, was slapped with a 25% across-the-board tariff that has been temporarily reduced to 10% for 90 days from early April. As with other nations, South Korea also faces a 25% levy on shipments of cars, steel and aluminum. Trade chiefs will be angling to speak with U.S. counterpart Jamieson Greer when officials gather in Jeju, South Korea, for an Asia-Pacific Economic Cooperation meeting this week. "Our economy is expected to slow down due to the worsening trade environment,' the think tank said. "An easing monetary policy is desirable to reduce the downward pressure on prices that may result from slowing domestic and foreign demand.'
Bloomberg
14-05-2025
- Business
- Bloomberg
South Korean Think Tank Halves 2025 Growth Forecast to 0.8%
A South Korean state-funded think tank slashed its outlook for the country's growth this year, reflecting the fallout from Donald Trump's tariff campaign on the trade-reliant nation as its presidential race hits full swing. The Korea Development Institute now sees the country's economy growing 0.8% in 2025 after expanding 2% last year, it said in its semiannual economic outlook released on Wednesday. The projection is down from February's forecast of 1.6% and underscores the pressing economic challenges South Korea faces as voters prepare to elect their new leader on June 3.
