Gov’t admits economy is still weak

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Gov’t admits economy is still weak

The Korean economy’s recovery is still weak, as a drop in corporate investment overshadows strong overseas shipments, according to a government report.

“Thanks to brisk exports, production in all industries made a turnaround for the first time in four months, but reduced facility investment has slowed the pace of growth,” the finance ministry said in its monthly economy assessment report called the “Green Book.”

The report is based on the latest economic indicators of such key factors as output, exports, consumption and corporate investment, which provide clues as to how the economy has been faring in recent months.

Korea’s exports have been on a roll since November last year on the back of an upturn in global demand. In August, outbound shipments jumped 17.4 percent from a year ago on stellar sales of chips and petrochemical products.

Output in manufacturing and mining increased 1.9 percent in July from a month earlier, rebounding from a 0.5 percent drop the previous month, while retail sales gained 0.2 percent for the second successive month.

However, such gains were offset by a 5.1 percent on-month fall in facility investment, backtracking from a 4.8 percent rise in June.

The finance ministry said that the Korean economy is expected to face escalating external downward pressures in the coming months, including trade issues and geopolitical risks centered on North Korea.

“Despite some negative signs, the economy will likely reach the 3 percent growth target this year if the current pace continues,” a finance ministry official said at a briefing.


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