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Korean economy faces 'downside risks' amid impeachment drama, gov't says

Published: 13 Dec. 2024, 16:29 Updated: 13 Dec. 2024, 16:32

Shoppers purchase groceries at a supermarket in Seoul on Dec. 3. [YONHAP]

The Korean economy faces “downside risks” due to uncertainties at home and abroad despite signs of stabilizing inflation, the Finance Ministry said Friday, in contrast to the previous month's assessment of “gradual recovery.”

The Ministry of Economy and Finance made the assessment in its monthly economic report, the Green Book, which was released about a week after President Yoon Suk Yeol's short-lived martial law declaration sparked significant market volatility.

“Concerns are growing over increased downside risks in the South Korean economy, including the contraction of economic sentiment among households and businesses due to escalating uncertainties at home and abroad,” the report said.

The latest assessment follows November's report, in which the Finance Ministry had softened the term “recovery” to “gradual recovery.”

Last month's Green Book also excluded the phrase “signs of domestic demand recovery” for the first time in seven months.

The Finance Ministry added while the global economy shows signs of recovery, geopolitical risks are creating an uncertain trade environment.

The government is actively working to uphold Korea's credibility by fostering interagency coordination led by economy-related ministers' meetings, the report added.

According to the report, Korea added 123,000 new jobs on year in November, with the unemployment rate standing at 2.2 percent, down 0.1 percentage points during the cited period.

Consumer prices, a key gauge of inflation, rose 1.5 percent on year in November following a 1.3 percent increase in October.

In October, Korea's industrial output fell 0.3 percent from the previous month, and retail sales, a measure of private spending, dropped 0.4 percent.

Facility investment saw a sharper decline in October, tumbling 5.8 percent from the previous month largely due to a slump in the construction sector.

Yonhap