South Korea’s economic slowdown is moderating somewhat, helped by an easing of external uncertainties and improvements in domestic demand, a state-run think tank said Thursday.

“The slowdown in overall industrial production has eased on improving manufacturing and service output,” the Korea Development Institute said in its monthly report. “Private consumption and business investment are maintaining upward momentum.”

Output in the manufacturing and service industries grew 14.4 percent and 5.5 percent each in February from a year earlier, according to government data.

While exports and imports contracted 1.4 percent and 1.2 percent in March, the country’s trade surplus grew to $2.3 billion from $1.5 billion tallied in the previous month, the think tank said.

The KDI also said there were improvements in the labor market and consumer prices.

Consumer prices grew 2.6 percent on-year, slowing from a 3.1 percent gain in February. Last month’s reading is the lowest in 20 months and marks the first time since August 2010 that inflation stood in the 2 percent range.

Reflecting such conditions, the consumer sentiment index reached 101 in March, up one point from a reading of 100 reported for the previous month. Estimation of the current economy, however, stood at 70 with numbers for the future economic conditions standing at 82, which are both beneath the break-even mark.

A reading below 100 means pessimists outnumber optimists with a reading above the break-even baseline meaning the opposite.

In a separate report, the finance ministry said that there are some signs of improvement in the general economy, but warned there is a need to keep close tabs on agricultural and crude oil prices.

Crude prices that directly impact living expenses and can raise prices of manufactured goods and food products, hit $122 per barrel in March from $105 in December.

The ministry pointed out that consumer prices for living necessities also moved up 2.0 percent on-year last month, which could become a burden for ordinary households.

“Taking into account these developments, the government plans to do its utmost to check inflationary pressure and keep alive the recent growth momentum,” the ministry said. 

(Yonhap News)