Due to COVID-19 Resurgence... Ministry of Economy and Finance Mentions 'Uncertainty' for 6 Consecutive Months

Recent Economic Trends (Green Book) (Photo by Yonhap News)

[Asia Economy Reporter Kwangho Lee] The government has mentioned 'uncertainty' regarding the economic situation for six consecutive months. In July, when the second half of the year began, it first referred to 'real economy uncertainty,' and from September, it pointed out a worsening trend, stating that 'uncertainty is expanding.' As the novel coronavirus infection (COVID-19) is raging along with the cold weather, this diagnosis is expected to continue for the time being.

On the 18th, the Ministry of Economy and Finance stated in the 'Recent Economic Trends (Green Book December issue)' that "exports continue to show a solid recovery, but since mid-November, due to the domestic COVID-19 resurgence and strengthened social distancing measures, uncertainty in the real economy, centered on domestic demand, is expanding." However, it also evaluated that "externally, there is also growing economic recovery optimism due to vaccine approvals and vaccinations."

The Ministry of Economy and Finance diagnosed in June that "downside risks to the real economy are somewhat easing," but since then, it has shown a cautious stance. This is interpreted as considering the domestic demand contraction and declining economic recovery strength due to the COVID-19 resurgence.

The expression 'expanding uncertainty' is expected to continue for the time being. Retail sales, a domestic demand indicator, decreased by 0.2% year-on-year in October, and since social distancing measures have been strengthened since mid-last month, retail sales indicators are expected to decline further. Sales at department stores and discount stores last month are expected to plunge by -3.9% and -4.3%, respectively.

Also, the October industrial activity trend showed that despite an increase in service sector production compared to the previous month, major indicators such as manufacturing (-1.2%), facility investment (-3.3%), and construction investment (-0.1%) all declined.

In the housing market, both the sales price increase rate (0.54%) and the jeonse price increase rate (0.66%) expanded in November.

Kim Young-hoon, head of the Economic Analysis Division at the Ministry of Economy and Finance, said, "While concentrating comprehensive capabilities to prevent the spread of COVID-19, we will strengthen all-out policy response efforts for a rapid and strong economic recovery and vitality restoration."

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