SEOUL: The South Korean economy continues to exhibit signs of recovery, primarily driven by robust exports and some sectors of domestic demand, according to the latest report from the finance ministry. Despite the promising indicators, challenges persist across various sectors, highlighting the uneven nature of the economic rebound.
According to Yonhap News Agency, the finance ministry’s assessment was detailed in its monthly economic report, the Green Book, which was released on Friday. The report underscores a trend of recovery centering on exports and the manufacturing sector, complemented by a stabilization of consumer prices. “The economy continues to show a recovery trend centering on exports and the manufacturing sector amid the stabilization of consumer prices. Domestic demand is also showing signs of a gradual recovery, led by facility investment and the service sector, though the pace differs among sectors,” the report stated.
The ministry also noted that domestic demand has shown signs of improve
ment for six consecutive months. Retail sales, which serve as a gauge of private spending, increased by 1.7 percent on a monthly basis in August, and service production saw a modest growth of 0.2 percent from the previous month. However, on a yearly basis, retail services declined by 1.3 percent due to weak demand in several consumer goods sectors, including cars and electronics. Additionally, both facility investment and construction investment experienced significant downturns, dropping 5.4 percent and 9 percent, respectively.
The report highlighted some positive developments in consumer behavior. “We’ve had some mixed signs about domestic demand. Credit card spending rose 4.6 percent on-year in September and the sales of vehicles at home grew 1.7 percent. But consumer sentiment fell last month from a month earlier,” an official from the ministry explained.
Exports continued to be a strong point for the economy, rising 7.5 percent year-on-year to $58.7 billion in September, marking the 12th consecutive mo
nth of gains. This increase was largely fueled by vigorous shipments of semiconductors.
Inflation remains under control, with consumer prices increasing by 1.6 percent year-on-year in September, the lowest level since February 2021. However, the ministry voiced concerns over potential economic slowdowns in major countries and the volatility in raw material prices, exacerbated by ongoing tensions in the Middle East.