The South Korean government raised hopes for recovery in domestic demand following strength in export front.

The Ministry of Strategy and Finance in its report on latest economic trend on Tuesday said consumption has begun to pick up on improved sentiment from reinvigorated industrial activity led by strong overseas demand in memory chips and petroleum products.

Exports in March jumped 13.7 percent on year to reach $48.88 billion, extending double-digit growth for three consecutive months for the first time in five years and six months.

The seasonally adjusted mining and manufacturing output in February declined 3.4 percent from the previous month due to adjustment in semiconductor production, but the ministry claimed output combined for January and February improved 1.9 percent from the fourth quarter of 2016.

Service sector output in February also grew by 0.1 percent on month to extend gain for the fourth straight month.

Facilities investment by companies sank 8.9 percent in February but expanded 3.0 percent in January-February period from the fourth quarter. Construction investment jumped 7.8 percent on month, driven by a rise in private housing construction and social overhead capital projects.

Retail sales - a barometer for private consumption - rose 3.2 percent on month in February after falls in the previous three consecutive months. The preliminary index for retail sales in March also improved from a year ago period.

Other data also suggest recovery in consumer spending. Credit card spending in domestic market jumped 13.7 percent on year while sales at department stores and big-box store chains grew 1.7 percent and 3.2 percent, respectively. Petrol and diesel fuel sales gained 4.8 percent on month.

Domestic car sales fell 2.6 percent against a year-ago period when sales tax was exempted for cars temporarily.

The composite consumer sentiment index stood at 96.9, the highest since November last year.

The number of Chinese tourists visiting Korea dipped 39.1 percent on year amid growing antagonism against Korea due to Seoul’s decision to deploy U.S antimissile system.

But the strategy and finance ministry projected consumption to keep positive, given improved consumer sentiment and rise in car fuel sales, and offset the negative impacts from the sharp decline in Chinese tourists.

By Kim Gyu-sik

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]