“Economic slowdown focused on exports and manufacturing… Domestic demand is gradually improving”
(Sejong = Yonhap Infomax) Reporter Wook Choi = The Ministry of Strategy and Finance has detected an economic slowdown for the fifth month, but assessed that downside risks are mitigating thanks to the recovery of domestic demand and the increase in employment.
In the June issue of ‘Recent Economic Trends (Green Book)’ published on the 16th, the Ministry of Strategy and Finance announced that “while the inflation rate continues to fall, the economic slowdown continues, focusing on exports and manufacturing.”
It has been the same evaluation for five months since Green Book first diagnosed the Korean economy as slowing in February.
However, this month, the positive side was further emphasized by adding the expression that downside risks to the economy are easing.
The Ministry of Strategy and Finance analyzed, “Downside risks are mitigating somewhat due to a gradual recovery in domestic demand, improved economic sentiment, and robust employment growth.”
As judged by the Ministry of Strategy and Finance, major economic indicators show signs of economic slowdown and positive signs at the same time.
In the April industrial activity trend, production in the mining industry and service industry fell by 1.2% and 0.3%, respectively, from the previous month.
As a result, all industrial production fell by 1.4%.
Facilities and construction investment increased by 0.9% and 1.2%, respectively, from the previous month, but retail sales fell by 2.3%.
For retail sales in May, an increase in Chinese tourists visiting Korea is expected to be a positive factor, while a decline in department store sales is expected to act as a negative factor.
Last month, the number of Chinese tourists who visited Korea increased by 1,258.6% compared to the same month last year.
The domestic sales volume of passenger vehicles and the domestic credit card approval amount also increased by 10.9% and 3.9%, respectively.
On the other hand, department store sales fell by 0.2%.
Exports in May fell 15.2 percent from the same month last year due to slow exports of information technology (IT) products such as semiconductors, wireless communications, and computers.
Average daily exports also fell 9.3% to $2.43 billion.
The Consumer Sentiment Index (CCSI) for May was 98.0, up 2.9 points (p) from the previous month.
The Business Survey Index (BSI) for all industries in May rose 4p from the previous month to 76, and the BSI for all industries in June rose 2p to 76.
The cyclical component of the coincidence index for April rose by 0.2p from the previous month, while the cyclical component of the leading index fell by 0.2p.
The number of those employed in May increased by 351,000 from the same month last year, and the unemployment rate fell by 0.3 percentage points to 2.7%.
In May, consumer prices rose by 3.3% year on year, slower than the previous month (3.7%).
The index excluding food and energy and the index excluding agricultural products and oil, which are core price indicators that show underlying price trends, rose by 3.9% and 4.3%, respectively.
“Externally, global economic uncertainty continues as negative risks such as financial tightening and the impact on vulnerable sectors due to the protracted Russia-Ukraine war intersect with expectations of China’s reopening (resumption of economic activity) and improvement in conditions the global IT industry,” said the Ministry of Strategy and Finance.
He added, “We will make every effort to ensure stable prices and livelihoods and manage internal and external risks, and focus on improving exports, investment, vitality and structural improvement of the economy in the second half of the year.”
wchoi@yna.co.kr
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This article was submitted at 10:00, 2 hours earlier on the Infomax financial information terminal.
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