Economy in early stages of recovery: Finance minister

Economy

Published: 04 Sep. 2023, 17:06 Updated: 04 Sep. 2023, 18:35

Economy in early stages of recovery: Finance minister

Finance Minister Choo Kyung-ho speaks in a meeting at the Government Complex in central Seoul on Monday. [YONHAP]

The Korean economy is in the early stages of recovery after hitting the bottom, according to Finance Minister Choo Kyung-ho on Monday.

Industrial activity waned in July due to temporary factors, like the climate, but export and service sectors have improved, Choo said in a meeting with economy-related ministers at the government complex in central Seoul.

“Despite the summer vacation season in August, chip exports recovered significantly while exports to China bounced back to above $10 billion" for the first time since June, Choo said.

“Logging a trade surplus for three consecutive months is a more favorable outcome than what was expected.”

Choo said a drop in exports is expected to slow down further before it swings back into positive territory in the fourth quarter.

Korea logged a trade surplus of $870 million in August, for a third straight gain. But exports fell for the 11th consecutive month in August largely due to a weakened demand in chips.

Chip exports recorded $8.6 billion, up from $6 billion in January.

Choo added Korea should refrain from being too optimistic due to uncertainties stemming from China.

The government will “strengthen the momentum for export recovery and encourage tourism to Korea to boost domestic demand,” Choo added.

The government pledged to provide up to 181 trillion won ($1.38 billion) in financing, with the private sector, to boost trade and exports by the end of the year. The funds will be used to build export infrastructure, including trade, marketing and logistics.

An additional 200 billion won worth of refund guarantees will be provided to shipbuilders to accelerate the industry’s growth.

A refund guarantee, which manages counter-party risks, promises that the money a person spent on a product will be returned if the product is not good enough.

Choo also vowed to attract more Chinese tourists now that China has lifted its ban on group tours to Korea.

The government will exempt the commission fee for issuing electronic visas for Chinese group tourists until the end of this year, and add 250,000 more stores that accept Alipay.

The number of tourists to Korea surpassed one million in July, a first since the Covid-19 pandemic. The figure fell as low as 61,000 in July 2020.

The goal is to attract 1.5 million Chinese tourists in the second half of the year, up from a total of 550,000 in the first half.

BY JIN MIN-JI [jin.minji@joongang.co.kr]