The South Korean government found the local economy mired in doldrums for the fourth month with worsened external conditions hurting exports and investment.
“The nation’s exports and investment continued to remain sluggish despite modest increase in consumption,” the Ministry of Finance and Economy said in its monthly economic review named Green Book for July. “The Korean economy is faced with lingering uncertainties stemming from global trade tensions and worsening external conditions due to sluggish global economic growth and chip industry downturn.”
The ministry used the word “sluggishness” to describe the current economic situation for four months in a row since April. The last time it mentioned sluggishness for the fourth straight month was from October 2016 to January 2017.
The ministry last month revised down this year’s growth outlook to 2.4-2.5 percent.
The country’s industrial output decreased 0.5 percent in May from the previous month due to a 1.7 percent fall in mining and manufacturing production from a 1.9 percent gain in April. Service sector activity rose 0.4 percent and 0.1 percent, respectively, in April and May from a month earlier. Retail sales gained 0.9 percent in May after sliding 1.2 percent in April, while capital investment tumbled 8.2 percent on month and construction investment retreated 0.3 percent.
Exports slipped 13.5 percent from a year ago in June due to the rapid fall in chip prices and weak demand from overseas markets including China, marking the 7th consecutive year-on-year decline from December 2018. According to the preliminary data, domestic automobile sales in June shrank 4.9 percent compared to the same month last year.
Consumer sentiment index (CSI) in May fell 0.4 point from a month ago to 97.5 in May. Business sentiment index (BSI) edged down 1 point to 75 and the reading for future outlook remained unchanged at 75.
By Sohn Il-seon and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]