Published : Aug. 9, 2016 - 11:30
The South Korean economy has hardly shown clear signs of recovery in recent months, as an apparent uptick in private consumption was offset by a slump in exports and industrial production, a government report said Tuesday.
"The economy has been experiencing improved domestic demand led by rising consumption, but the production front has remained in the doldrums due to faltering exports," the finance ministry said in its monthly economy assessment report called the "Green Book."
The report is based on the latest economic indicators of such key factors as output, exports, consumption and corporate investment that could provide clues as to how the economy has been faring in recent months.
The latest data demonstrated that consumption and production have been moving in the opposite direction, while the government poured in nearly 30 trillion won ($27.05 billion), including 11 trillion won worth of an extra budget, to boost Asia's fourth-largest economy.
Retail sales are the mainstay of the demand side, partly recovering from a deep depression derived from the outbreak of Middle East Respiratory Syndrome a year ago.
Sales of passenger cars soared 24.1 percent on-year in June to steer total retail sales to an 8.9-percent jump, up from a 5.3-percent gain in May, as more people rushed to buy cars before the government's tax-cut program ended on June 30.
The service industry saw its production gain 1 percent in June from a month earlier on the back of brisk sales of cars and increased stock transactions.
But the ministry report noted that the end of the excise tax benefit program weighed heavily on domestic consumption as car sales fell 10.5 percent on-year in July.
The production side, however, has been lackluster as exports dropped 10.2 percent in July, far widening from the monthly decline of 2.7 percent tallied in June.
The figure extended its losing streak to a record 19 straight months, having posted negative growth since the first month of 2015.
Output of the mining and manufacturing sectors, directly linked with exports, backtracked to fall 0.2 percent on-month in June due to sluggish production of key items such as automobiles and ships.
"The South Korean economy is facing downside risks led by global financial uncertainties following the British exit from the European Union and the impact of the on-going corporate restructuring," the ministry said. "The South Korean government will tighten monitoring of the external financial conditions to cushion any fallout from the heightened uncertainties." (Yonhap)