Concerns loom for Korean economy on weak consumption, exports

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Concerns loom for Korean economy on weak consumption, exports

Published: 13 Jan. 2023, 11:41 Updated: 13 Jan. 2023, 11:57

A customer shops for strawberries at a discount mart in Seoul on Thursday. [YONHAP]

The Korean economy is feared to face a bumpy road ahead on high inflation, slowing domestic consumption as well as sluggish exports, the Finance Ministry said Friday.

"Recently, the Korean economy's inflation continued to stay at a high plateau, and the recovery of domestic consumption has slowed. The weak economic sentiment has continued on weak exports as well, leading to concerns over an economic slowdown," the Ministry of Economy and Finance said.

It was the eighth consecutive time the ministry mentioned the possibility of an economic slowdown in its monthly economic assessment report, called the Green Book.

In November, Korea's output in the mining, manufacturing, gas and electricity industries, as well as facility investment, improved on-month. Retail sales, a gauge of private spending, however, decreased 1.8 percent on month, extending losses to the third consecutive month.

Last month, Korea added jobs for the 22nd straight month, but the growth continued to slow for the seventh month in a row amid concerns over an economic recession.

Consumer prices, meanwhile, grew 5 percent from a year earlier in December, staying at 5 percent or higher for the eighth month in a row.

For December, monthly exports also fell 9.5 percent on-year to stand at $54.99 billion, extending the losing streak to the third consecutive month. It was the first time since 1997 that the country has suffered a trade deficit for nine months in a row as well.

The Finance Ministry added Korea is also anticipated to face challenging external conditions.

"Externally, the uncertainties have persisted surrounding the speed of monetary tightening and China's quarantine situations," the ministry said.

"Along with the slowed growth of major economies, the downward pressure for the global economy has continued on the war between Russia and Ukraine," it added.

Yonhap