The high price era… Consumption slows even after social distancing is lifted [기로에 선 실물경제]

• 5% high inflation in front of the era… eat away at demand
  Although social distancing has been lifted, consumption is on the decline
  ‘Post-Corona Consumption Explosion’ becomes empty in high prices
  Both the current economic analysis and the future outlook index fell.

[헤럴드경제=홍태화 기자] “As inflation ceased to be a story for a day or two, the price of goods rose sharply, and therefore played a role in lowering consumer demand. However, it is difficult to say that demand has deteriorated due to the fact that consumption capacity has been forcibly condensed through the COVID-19 outbreak.

An official from the National Statistical Office explained as follows regarding the industrial activity trend in April on the 31st. It is said that the continued rise in prices has eroded the consumption capacity in part. Even with the lifting of social distancing, the underlying cause of the decline in retail sales is inflation. It is difficult to say that the overall demand itself has decreased due to the increase in service production, but it is showing a different pattern from the initially expected ‘post-coronavirus, consumption explosion’.

With external uncertainty added to this, economic sentiment is rapidly deteriorating. While the business due diligence index is drawing a downward curve, the cyclical volatility of the leading composite index, which predicts the future economy, has fallen for 10 consecutive months. The cyclical value of the coincident composite index, which represents the current economy, also showed a decreasing trend.

According to the industrial activity trend announced by the National Statistical Office on the same day, retail sales increased in semi-durable goods such as clothes (7.7%) and durable goods such as automobiles (0.4%), but sales of non-durable goods such as pharmaceuticals (-3.4%) decreased, decreasing 0.2% from the previous month. . By business type, sales decreased in passenger car and fuel retail stores (-5.6%), duty-free stores (-14.4%), supermarkets and general stores (-4.6%), and large marts (-3.9%). It increased in specialty retail stores (5.3%), department stores (14.5%), non-store retail (1.8%), and convenience stores (6.2%).

Retail sales failed to turn upward for the fourth straight month. Last month, it decreased 0.7%, and in February it flattened to 0%. In January, it decreased by 2.0%.

However, it is difficult to see that the overall demand itself is declining. According to industrial activity trends, consumption is limited to goods as retail sales. Service demand must be found in service production. Production in the service industry increased by 1.4% from the previous month as production increased in lodging/restaurants (11.5%) and association/repair/individuals (8.7%).

Nevertheless, concerns are raised about low growth in that the consumption effect is slowing due to the lifting of the distance. It can also be seen in indicators. Both the coincident and leading index cyclical values ​​fell by 0.3 points.

Eo Woon-seon, director of economic trend statistics at Statistics Korea, met with reporters on the same day and said, “The overall production has turned to a decline as mining and industrial production has been adjusted, and domestic indicators such as retail sales and facility investment have also been somewhat sluggish. It looked like that,” he said.

He said, “The external unrest factors such as global supply chain disruption, international raw material price rise, and concerns about global inflation (inflation) and other adverse factors such as the Ukraine crisis acted as a downside factor. As there are upside factors, the future economic trend is highly uncertain.”

th5@heraldcorp.com