Published 12 Jan.2024 10:02(KST)
Updated 12 Jan.2024 10:12(KST)
The government has diagnosed that signs of economic recovery are gradually expanding. This is a step further from the assessment in November-December last year that "signs of economic recovery are appearing." It was evaluated that exports of ships (47%) and semiconductors (13%) are leading the economic recovery. Potential risks such as real estate project financing (PF), which became problematic due to the Taeyoung Construction workout case, were also mentioned.
The Ministry of Economy and Finance stated in the 'Recent Economic Trends for January' published on the 12th, "While the inflation rate continues to slow down, signs of economic recovery centered on exports are gradually expanding." However, it mentioned that there are some differences in the speed of recovery across economic sectors, such as concerns over the slowdown in private consumption and sluggish construction investment.
The government's perception of the economy is gradually improving. After mentioning a "partial easing" of the economic slowdown in August last year, in November it stated for the first time in one year and five months that "signs of economic recovery are appearing," and maintained this view in December. Then, in January, it presented an economic perception that took a step further by stating that signs of economic recovery are expanding.
Exports are driving the economic recovery. Last year, exports increased by 5.1% compared to the same month of the previous year due to the expansion of exports in semiconductors, automobiles, and ships. In December, exports recorded $57.66 billion, a 5.1% increase compared to the same month of the previous year, and the average daily export amount was $2.56 billion, a 14.5% increase compared to the same month of the previous year. By item, ships increased by 47%, semiconductors by 13%, automobiles by 18%, displays by 11%, biohealth by 4%, petrochemicals by 4%, and home appliances by 3%. By region, among the nine major export regions, four regions showed increases: the United States by 21%, India by 7%, Japan by 4%, and ASEAN by 2%.
Imports in December last year also decreased by 10.8% compared to the same month of the previous year, resulting in a trade surplus of $4.48 billion in December. Although the annual trade balance last year showed a deficit of $9.97 billion, it shifted from a deficit trend in the first half of the year to a surplus trend in the second half.
International oil prices, which have a significant impact on our economy, continue to decline. In December last year, international oil prices fell due to uncertainties over production cuts by the Organization of the Petroleum Exporting Countries (OPEC)+ and increased crude oil production in the United States. However, the government added that the decline in international oil prices is limited due to disruptions in oil transportation in the Red Sea region caused by attacks on ships by Yemen's Houthi rebels and expectations of an early interest rate cut by the U.S. Federal Reserve (Fed).
The employment and consumption trends in the U.S. economy also appeared to be solid. In December last year, the employment market recorded an increase of 216,000 non-farm payroll jobs, exceeding the expected 170,000, and the unemployment rate remained at the previous month's level. However, uncertainties remain regarding the future pace of inflation slowdown and the direction of the Fed's monetary policy accordingly.
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