KDI, "Sharp Decline in Exports... Continued Economic Slump"

KDI, April Economic Trends

The Korea Development Institute (KDI) analyzed that exports have sharply declined, leading to a continued domestic economic downturn.

On the 9th, KDI made this assessment in its April Economic Trends report. KDI stated, "Although the domestic demand slump in the Korean economy has somewhat eased, exports have sharply decreased, resulting in an economic downturn." Earlier in March, it had also concluded a "continued economic downturn," but described the situation as an "export contraction."

KDI has now elevated the term "export contraction" to "sharp decline" to diagnose the crisis. While domestic demand has improved, worsening exports are causing the economic downturn to persist. However, KDI noted that the economic slump has somewhat eased, particularly in the service sector.

As the country moves beyond COVID-19, the growth rate of service sector production expanded from 4.8% year-on-year in the same month last year to 7.2%. Retail sales, centered on automobiles, also showed some easing of the slump. Nevertheless, due to the continued economic downturn caused by export contraction, exports in March fell 13.6% compared to the same month last year. In particular, exports were sluggish, centered on semiconductors. Manufacturing showed a sharp decline in production as high inventory levels and low operating rates persisted.

On the 4th, Statistics Korea reported that the Consumer Price Index in March rose by 4.2% compared to the same month last year, marking the smallest increase in one year. Consumer prices remained in the 4% range for two consecutive months following February's 4.8% rise, raising expectations of disinflation as the rate of increase slows. The photo shows a traditional market in Seoul. Photo by Dongju Yoon doso7@

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