The Samsung crisis could weigh on the Korean economy

Although the South Korean manufacturer giant tries to climb the slope to solve battery problems with its Note 7 with its inexplicable explosion, the consequences are felt in a major and analysts are worried.
Samsung has stopped production of its Galaxy Note 7

Samsung is all over the country and some South Korean love to make a joke. Samsung born in a clinic, have a Samsung refrigerator, etc. Everything can be Samsung. But Samsung continues its dive and this has a negative impact on the growth of the country.

Tuesday, this Smartphone giant manufacturer in the world which represents 17% of South Korean GDP, announced that it will stop production of its flagship Galaxy Note 7. The reason they are the explosions of the batteries of the latter due to manufacturing defect. The action of Samsung fall, plus he has to manage a global trade crisis order and this is not all, the firm must also cut its forecast quarterly profits.

Samsung leads his country's economy in the fall

Export declines are reduced to 25% by the Samsung products while they represent 50% of South Korea's income. Korean exports of mobile telephony are represented at 60% by the Samsung smartphones, and in just one month, in September, exports in the mobile phone industry fell by 34% which results in a decrease of 6% total exports.

At the monthly monetary policy meeting of the Bank, the Governor of the Bank of Korea, Lee Ju-Yelo said it had taken into account the consequences of the cessation of production of the Galaxy Note 7 in its forecast. For this, the bank has fallen from 2.9% to 2.8% its growth forecast for next year. After the caution of many economists on the domino effect of the crisis that Samsung could have repercussions on the entire South Korean economy, the Bank of Korea has taken this revision. However, the main interest rate remained at 1.25% for the fourth consecutive month. This is the lowest historical rate.

"If Samsung stumbles, the South Korean economy is weakening," that is what was said a South Korean columnist in the national newspaper Dong-a Ilbo Tuesday.