Ministry of Economy and Finance Presents Improved Economic Assessment: "Consumption Turns Upward... Positive Signs Emerge"

Ministry of Economy and Finance Releases August Green Book (Recent Economic Trends)
Omission of "Downward Pressure on the Economy" Phrase After Seven Consecutive Months

The government has assessed that positive signals are emerging, stating in its "Recent Economic Trends (Green Book)" report that "consumption is shifting to an upward trend due to policy effects." This month’s economic diagnosis report, published monthly by the government, contains even more optimistic remarks compared to last month. The phrase "downward pressure on the economy," which had appeared for seven consecutive months, was omitted.

Amid U.S. President Donald Trump’s announcement on August 1 to impose a 25% reciprocal tariff on all Korean imports, cars and containers awaiting shipment are lined up at the export yard of Pyeongtaek Port, Gyeonggi Province, on July 8, 2025. Photo by Kang Jinhyung

On August 14, the Ministry of Economy and Finance stated in its "August Recent Economic Trends (Green Book)" that "although concerns persist regarding delayed recovery in construction investment, employment difficulties concentrated in vulnerable sectors, and fears of export slowdown due to U.S. tariffs, positive signals for future economic recovery are also emerging, such as consumption turning to an upward trend as a result of policy effects." This includes the slight improvement in the economy following the conclusion of tariff negotiations with the Donald Trump administration and the issuance of livelihood recovery consumption coupons. The government publishes a comprehensive monthly report on economic conditions, known as the Green Book due to its green cover. This is the first time since November of last year that the Ministry has used positive language regarding consumption.

The expression "downward pressure on the economy remains," which was included as recently as last month, has been omitted. Since the declaration of martial law in December of last year, the Ministry had continuously used the phrase "downward risks (pressure) on the economy have increased" starting with the January issue. Last month, the language was softened to say that downward pressure "remains," but this month, any mention of downward pressure has been excluded. Cho Sungjoong, Director of Economic Analysis at the Ministry, explained, "Although concerns about export slowdown still linger, uncertainty has clearly eased with the conclusion of the tariff negotiations. In addition, with consumption picking up, we have considered both the ongoing external difficulties and the areas where conditions have improved."

In fact, domestic demand indicators are showing gradual improvement. In June, retail sales increased by 0.5% compared to the previous month and by 0.1% year-on-year. The Ministry noted, "Improvement in the consumer sentiment index and an increase in domestic card approval volume are positive factors." The consumer sentiment index for July recorded 110.8, showing a slight improvement from June (108.7). The domestic card approval amount in July also increased by 6.3% year-on-year, an improvement over May (2.7%) and June (3.7%).

However, the year-on-year growth rate of card approvals at discount stores fell by 9.6% in July, a larger decline than in June (-1.6%). Domestic passenger car sales also increased by only 2.0% year-on-year. The Ministry stated, "The slowdown in the growth of domestic passenger car sales is expected to act as a negative factor for retail sales." Director Cho explained, "Although the livelihood recovery consumption coupons began to be issued on the 21st of last month, signs of increased consumption have been visible since early July, when the issuance was anticipated."

Exports are also performing well. Total exports in July increased by 5.9% year-on-year, and average daily exports reached $2.43 billion, up 5.9% from the same month last year. In June, total industrial production increased by 1.2% compared to the previous month and by 0.8% year-on-year. Compared to the previous month, production increased in all sectors: manufacturing (1.6%), construction (6.7%), services (0.5%), and public administration (1.4%). The Ministry stated, "While mobilizing all government resources to ensure that the livelihood recovery consumption coupons serve as a catalyst for revitalizing domestic demand, consumption, and the regional economy, we will also make every effort to support Korean companies affected by U.S. tariffs and to respond to trade risks."

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