Government Emphasizes Economic Recovery... "Domestic Indicators Continue to Improve, Export and Production Weaknesses Ease"

Ministry of Economy and Finance, Recent Economic Trends in August

(Photo) [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] On the 14th, the government diagnosed that "the improvement trend of domestic demand-related indicators is continuing." This reflects a cautiously optimistic view of the recent economic situation. However, some argue that it is still premature to be optimistic about economic recovery centered on the improvement of domestic demand indicators.

On this day, the Ministry of Economy and Finance published the August issue of the recent economic trends (Green Book), which focused on this content.

The assessment of the economic situation has become brighter. Following the July statement that "an improvement trend in domestic demand-related indicators is appearing," the August report evaluated that "this trend is continuing, and the sluggishness in exports and production is somewhat easing." Regarding the real economy, the phrase "high uncertainty" was softened to "continued uncertainty."

Kim Young-hoon, head of the Economic Analysis Division at the Ministry of Economy and Finance, explained, "Economic judgments are based on indicators, and since major economic indicators have improved, negative expressions have been reduced," adding, "The government has judged the economic situation more positively than before."

One of the grounds for this economic improvement cited by the Ministry of Economy and Finance is the surprising rebound in industrial activity indicators. The three major industrial activity indicators?production (up 4.2% compared to the previous month), consumption (2.4%), and facility investment (5.4%)?all rebounded simultaneously in June. Consumer prices in July rose by 0.3% year-on-year, marking an increase after two months of decline.

The employment situation is also showing signs of recovery. Although the decline in the number of employed persons has continued for five consecutive months until last month, the decrease narrowed from 476,000 in April to 277,000 in July this year. Regarding this, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated, "It is a fact that the employment situation has been steadily improving every month since May."

The decline in exports is also decreasing. Compared to the same period last year, exports recorded -25.5% in April, -23.7% in May, -10.9% in June, and -7.0% in July.

Kim said, "Externally, the financial market is stable, and major countries' real indicators are improving, but concerns about delays in global economic recovery remain due to the continued spread of the novel coronavirus infection (COVID-19) worldwide and escalating conflicts among major countries." He added, "The government will make every effort to manage domestic and external risks to ensure a definite economic rebound in the second half of the year, while strengthening comprehensive policy responses such as the swift execution of the third supplementary budget, revitalization of consumption, investment, and exports, and acceleration of the Korean New Deal."

This content was produced with the assistance of AI translation services.