KDI "Strong Quarantine Measures Continue... In-Person Service Industry Slump Deepens Again"

KDI 'September Economic Trends'
COVID-19 Resurgence... "Negative Impact on Youth Employment"

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The Korea Development Institute (KDI) diagnosed that the sluggishness in face-to-face service industries has deepened again due to the continued strong quarantine measures centered on the Seoul metropolitan area.

In the 'September Economic Trends' report released on the 7th, KDI evaluated, "The consumer sentiment index has declined, and the rise in raw material prices is also dampening manufacturing business sentiment."

Overall service industry production recorded a 4.2% increase, similar to the previous month (5.0%), but accommodation and food services (-0.6% → -7.5%) and arts, sports, and leisure-related services (12.2% → 2.0%) showed a decrease. On the other hand, wholesale and retail trade (3.8% → 6.1%) and finance and insurance (9.9% → 7.4%) maintained an upward trend.

KDI assessed that "although the face-to-face service sectors worsened, the service industry showed growth centered on wholesale and retail trade and finance and insurance."

They expressed concern that the consumer sentiment index for August also fell by 0.7 points from the previous month (103.2) to 102.5 due to the resurgence of COVID-19.

Exports are expected to continue a favorable trend recently, centered on major items such as semiconductors. August exports increased by 34.9% compared to August last year, marking the highest ever for August. Additionally, facility investment is maintaining a solid growth trend, driving improvements in manufacturing.

The number of employed persons in July increased by 542,000, a smaller increase than June (582,000). KDI diagnosed that "the negative impact of the COVID-19 resurgence is appearing mainly in face-to-face service industries and youth employment."

Consumer prices are maintaining an upward trend mainly due to raw material prices. The consumer price index for August remained the same as the previous month at 2.6%. In particular, prices of agricultural, livestock, and fishery products (7.8%) and industrial products (21.6%) continued to rise.

Although the financial market is generally stable, concerns remain over the continued high growth rate of household debt. In July, bank household loans recorded a high increase in mortgage loans, and other loans including credit loans also rose sharply, resulting in an 11.1% increase compared to the same period last year.

Furthermore, the global economy is showing a recovery trend mainly in advanced countries, but in many emerging countries, economic uncertainty is increasing due to the resurgence of COVID-19.

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