Manufacturing shrinking less quickly, think tank says

Containers are stacked at a port in Busan. [YONHAP]

The Korean economy appears to have passed its nadir recently on the back of the recovery in the manufacturing sector, a state-run think tank said Sunday.

The assessment came after Asia's fourth-largest economy saw its industrial output rise 1.3 percent in May from a month earlier, with retail sales and facility investment gaining ground as well.

"The Korean economy appears to be navigating its economic trough, with a partial easing in the downturn of the manufacturing industry," the Korea Development Institute (KDI) said.

"The manufacturing industry shows signs of moderating its contraction, as evidenced by a slower decrease in production and exports, notably in semiconductors," it added.

Exports of semiconductors, the country's key export item, sank 28 percent on-year in June amid falling demand and a drop in chip prices. The drop, however, slowed from a 36.2 percent on-year decrease tallied a month earlier.

The KDI also noted that the job market remained "favorable," with the service sector also posting moderate growth.

Yonhap