South Korea worries about growing economic risks, amid impeachment push for President Park

South Korea’ finance ministry said on Thursday it is concerned about further risks to the economy from “domestic issues”, as parliament prepares to hold an impeachment vote on South Korean President Park Geun-hye.

The ministry did not explicitly point to the deepening political scandal surrounding Park in its monthly assessment of the economy, but said it was concerned domestic issues may result in weaker consumption and investment at a time when many global uncertainties persist.

That would put more pressure on an economy that is grappling with record household debt, dozens of zombie companies under restructuring and weak exports, which have been further dampened by Samsung Electronics Co’s decision to scrap its fire-prone flagship smartphone Galaxy Note 7 and a strike at Hyundai Motor Co.

South Korea is bracing for another possible hit to trade if President-elect Donald Trump follows through on his protectionism rhetoric once he takes office in January, while its financial markets – like other emerging economies – have been roiled by expectations of more U.S. interest rate hikes starting as soon as next week.

South Korea’s manufacturing activity shrank for the fourth straight month in November and export orders also fell, albeit at a slower pace than in October, a private survey showed last week.

“We’re seeing a pause in investment and policymaking in general due to political uncertainties,” said Jung Kyu-chul, an economist at state-run Korea Development Institute.

While the think tank forecasts the economy will grow 2.4 percent next year, down from 2.6 percent estimated for 2016, “it could easily be cut to just above 2 percent in 2017 if this scandal drags on and takes steam out of everything from consumption to investment to job market,” he said.

The ministry report came a day after Finance Minister Yoo Il-ho cited the uncertain outlook for leadership in Asia’s fourth-largest economy as a risk to growth.

Consumers already have turned the glummest since the global financial crisis.

A Bank of Korea survey showed consumer sentiment last month fell to its lowest since April 2009, on the same week that Park’s approval rating sank to an all-time low of 4 percent.