"Global Economic Slowdown in Q4 Worsens Manufacturing and Services... Weak Growth Trend Ahead"

Bank of Korea, Regional Economic Report

On Christmas Day, the Myeongdong shopping street in Jung-gu, Seoul is bustling with citizens and tourists. Photo by Dongju Yoon doso7@

[Asia Economy Reporter Seo So-jeong] In the fourth quarter of this year, the regional economy slightly deteriorated compared to the previous quarter due to sluggish manufacturing production caused by the global economic slowdown and a pause in the recovery of service sector production. Going forward, the regional economy is expected to show a weak growth trend, with both manufacturing and service production maintaining the fourth quarter levels.

The Bank of Korea stated in its regional economic report published on the 26th, "Uncertainty remains high domestically and internationally due to factors such as the easing of monetary tightening by major countries and intensified financial instability at home and abroad."

Regarding regional production status, the Bank of Korea explained, "Manufacturing production decreased compared to the previous quarter due to sluggish exports caused by the global economic slowdown." In particular, the 수도권 (Capital Region), 충청권 (Chungcheong Region), and 호남권 (Honam Region) showed a declining trend. Looking ahead, manufacturing production is expected to maintain the fourth quarter level in most regions due to the impact of economic sluggishness in major countries.

As for service sector production, despite the continued recovery of daily life, the recovery momentum weakened, resulting in a stable level mainly in 수도권 (Capital Region), 충청권 (Chungcheong Region), 호남권 (Honam Region), and 제주권 (Jeju Region). Service production is expected to remain at the fourth quarter level, with the recovery trend somewhat slowing down.

During the fourth quarter, private consumption maintained the previous quarter's level as the pent-up momentum of service consumption slightly weakened. The 호남권 (Honam Region) and 제주권 (Jeju Region) showed an increasing trend compared to the previous quarter, while 수도권 (Capital Region), 동남권 (Southeast Region), 충청권 (Chungcheong Region), and 대경권 (Daegu-Gyeongbuk Region) remained stable. The Bank of Korea said, "Going forward, private consumption is expected to show a moderate recovery trend as the growth of face-to-face services slows, and factors such as decreased real purchasing power and rising interest rates act as constraints."

Facility investment decreased in some industries due to concerns about economic slowdown but remained stable overall as investments related to eco-friendly and new businesses continued. 수도권 (Capital Region), 동남권 (Southeast Region), 충청권 (Chungcheong Region), 호남권 (Honam Region), and 대경권 (Daegu-Gyeongbuk Region) showed stability, while 강원권 (Gangwon Region) and 제주권 (Jeju Region) experienced declines. Facility investment is expected to contract due to expanded global economic uncertainty and rising capital procurement costs.

Construction investment decreased in the private sector, mainly in residential buildings, but was maintained at the previous quarter's level due to increased budget execution for public sector social overhead capital (SOC). The Bank of Korea stated, "Construction investment is expected to decline due to a slowdown in the housing market and reductions in government SOC budgets."

Exports (daily average) decreased compared to the previous quarter in most industries except for automobiles, mobile phones, and parts, due to the global demand slowdown. The decline was particularly notable in 수도권 (Capital Region), 충청권 (Chungcheong Region), and 호남권 (Honam Region). The Bank of Korea added, "Exports are expected to slightly decrease going forward due to economic sluggishness in major countries."

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