The South Korean economy has been recovering at a slow pace in recent months, deterred by faltering exports and sluggish industrial output despite a rise in private consumption, a state-run think thank said on Oct. 9.
“Korea’s domestic demand sustained moderate growth led by construction investment, but overall recovery has been slow on weak exports and manufacturing production,” the Korea Development Institute said in its monthly report of the country’s economic conditions.
Consumption and facility investment have played an important role in propping up Asia’s fourth-largest economy for nearly a year, counterbalancing slumping exports which have posted negative growth 20 times out of 21 months since January 2015.
According to the report, retail sales increased 6 percent in August from a year earlier, expanding from a 4.4 percent, on-year gain in July, on a sharp rise in demand for home appliances and foods amid the sweltering heat in the summer and the Chuseok holiday in September.
Construction order received in August grew 54.6 percent in August from a year earlier, while facility investment grew 3.6 percent on-year on the back of a turnaround in equipment investment.
However, exports declined further on the global economic slowdown coupled with temporary factors such as strikes at automakers and faltering shipping industry.
South Korea’s exports fell 5.9 percent from a year earlier in September, while the current account surplus hit the lowest in four months in August.