Government: 'Economic slowdown in Gyeonggi continues'... Downside risks 'somewhat eased' → 'eased'

Ministry of Economy and Finance Announces 'Recent Economic Trends (Greenbook) July Issue'

Although the recent slowdown in the South Korean economy continues, the government has diagnosed that downside risks in domestic demand and employment are easing.

On the 14th, the Ministry of Economy and Finance explained through the July "Recent Economic Trends (Green Book)" that "the economic slowdown continues mainly in the manufacturing sector," but also noted "signs of easing downside risks due to some improvement in export sluggishness, gradual recovery in domestic demand and economic sentiment, and solid employment."

The government placed greater emphasis on the positive assessment of the economic improvement trend this month. In the June Green Book, it mentioned a "continued" decline in the inflation rate and a "slight" easing of downside risks. However, in this month’s Green Book, the slowdown in inflation was evaluated as "clear," and the downside risks were seen to have progressed from "slight easing" to an "easing trend." Lee Seung-han, head of the Economic Analysis Division at the Ministry of Economy and Finance, said, "In June, we mentioned that the inflation rate was 'continuously' declining, but this month we raised the tone slightly by stating that the slowdown in inflation is clear," adding, "the downside risks also dropped the word 'slight' from 'slight easing.'"

Exports, which had been sluggish, were assessed as recovering. Last month, exports decreased by 6% compared to a year earlier. However, the decline was the smallest in eight months since November last year. Considering the number of working days, the average daily export was $2.36 billion, down 10.1% from the previous year. The trade balance recorded a surplus of $1.13 billion, marking a surplus for the first time in 16 months.

Total industrial production also increased by 1.3% month-on-month as of May. Mining, manufacturing, and electricity and gas sectors all rose, leading to a 3.2% increase in mining and manufacturing production compared to the previous month. Public administration (5.6%) and construction (0.5%) also increased. However, service sector production decreased by 0.1% compared to the previous month.

The consumer price inflation rate was 2.7% year-on-year, entering the 2% range for the first time in 21 months. The government noted that the slowdown in inflation is clear and expects a "high in the first half and low in the second half" trend in the latter half of the year. Domestic demand is also showing a gradual recovery. Retail sales, which indicate consumption trends, increased by 0.4% month-on-month in May. Last month, South Korea’s Consumer Sentiment Index (CSI) rose by 2.7 points to 100.7 compared to the previous month. Domestic card approval amounts increased by 5.4% year-on-year, and the number of Chinese tourists visiting Korea increased by 1303.3% compared to a year earlier. Employment in June increased by 333,000 compared to the same month last year. The unemployment rate was 2.7%, down 0.3 percentage points from a year earlier.

The government stated, "Externally, expectations for improvement in the information technology (IT) sector continue, while expectations and concerns about the effects of China’s reopening of economic activities are mixed," and added, "We will swiftly push forward key policy tasks in the economic policy direction for the second half of the year to stabilize the livelihood economy and improve the economic structure."

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