South Korea’s central bank chief said sluggish private consumption should be boosted by job growth in the service sector, cautioning against optimism from rebounding exports.

“To revive consumption, people’s income should be increased through job creation. And such job creation should be led by the service industry rather than the manufacturing sector,” Bank of Korea Gov. Lee Ju-yeol said at a meeting with economists, professors and financial industry executives.

“With exports showing some progress, the growth trend is continuing. Business and consumer sentiment seems to have improved a little. But still there are concerns that export prospects are not that rosy.”

Recent data released by the Trade Ministry signaled that the nation’s exports and domestic demand, the main pillars of the economy, improved significantly last month.

Exports rose 13.7 percent in March from a year earlier, the largest gain since December 2014 and an increase for the fifth consecutive month. Imports surged 26.9 percent last month from a year earlier, as well.

Private consumption recorded 3.2 percent on-year growth in February, ending the previous four consecutive months of contraction, the ministry’s data showed.

However, economists project that the nation’s growth would slow this year to a range between a low 2 percent level to 2.5 percent, from 2.8 percent in 2016, citing greater risk in weak domestic demand.

Lee urged deregulation in the service sector so that it can create jobs and contribute to consumption.

“There are too many regulations in the service industry such as strict rules on market entry and excessive restrictions on business operation,” he said.

Six experts met with Lee including Kwon Goo-hoon, an economist at Goldman Sachs, Kim Se-jik, an economics professor at Seoul National University, and Lim Ji-won, an economist at JP Morgan Chase.

Most of them agreed that the improvement in Korea’s exports was supported by a rebound in global demand, but some of them cited the spread of protectionism and divergence in economic cycles between advanced and developing countries as a risk in the full rebound of global trade to the pre-2008 global financial crisis level, the BOK said in a statement after the meeting.

By Kim Yoon-mi (yoonmi@heraldcorp.com)