MoEF "Concerns Over Omicron Limiting Domestic Recovery, External Conditions' Uncertainty Continues to Expand"

[Asia Economy Sejong=Reporter Kim Hyewon] On the 18th, the government diagnosed that recent economic conditions face concerns over constraints on domestic demand recovery due to domestic and international variables such as the spread of the COVID-19 variant virus Omicron.

Externally, it evaluated that uncertainty continues to grow as the U.S. Federal Reserve's (Fed) interest rate hikes, supply chain disruptions caused by Russia's invasion of Ukraine, and inflation concerns intensify.

The Ministry of Economy and Finance stated in the 'Recent Economic Trends (Green Book) March issue' on the same day, "Our economy continues to see an expansion in employment growth and exports maintain a steady improvement, but there are concerns about constraints on domestic demand recovery due to the spread of variant viruses."

From December last year to last month, the Green Book expressed concerns about the impact on domestic demand, but this time it included the word 'constraints,' which is interpreted as raising the level of crisis awareness.

The recent COVID-19 Omicron variant pandemic is approaching its peak. The number of new confirmed cases entered the 600,000 range for the first time yesterday.

Domestic card approval amount in February increased by 7.6% compared to a year ago. Department store sales rose by 5.9%, but discount store sales decreased by as much as 19.4%. The Ministry of Economy and Finance forecasted regarding the February retail sales index to be announced soon, "The increase in domestic passenger car sales is a positive factor, but the decline in consumer sentiment index and decrease in discount store sales will act as negative factors."

Regarding external conditions, the government raised the level of caution again from 'continued uncertainty' last month to 'expanded uncertainty' and this month to 'continued expanded uncertainty.'

The Ministry of Economy and Finance mentioned, "With the start of major countries' monetary policy shifts such as the Fed's interest rate hikes, supply chain disruptions and inflation concerns have intensified due to the impact of Russia's invasion of Ukraine, increasing volatility in raw materials and financial markets, thereby continuing to expand uncertainty."

It added, "We will make every effort to stabilize livelihoods through proactive price management, check domestic and international risks, and minimize the ripple effects on our economy," and "We will focus on responding to damages caused by the spread of variant viruses and supporting economic recovery through rapid execution of supplementary budgets (supplementary budget)."

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