S. Korean economy experiencing slow recovery
SEJONG-- The pace of South Korea's economic recovery has slowed down to some extent as brisk exports and investment are offset by a slight downturn in industrial production and sluggish private consumption, a state-run think tank said Thursday.
"The Korean economy maintained modest improvements in economic activities led by exports and investment," the Korea Development Institute (KDI) said in its monthly evaluation of the country's economic conditions. "However, the pace of improvement is slowing on sluggish production growth."
Asia's fourth-largest economy saw its exports rise for eight straight months through June, triggered by an upturn in global trade.
South Korea's outbound shipments jumped 13.7 percent last month from a year earlier, buoyed by a 52 percent surge in exports of semiconductors and 15.6 percent rise in petrochemicals.
Facility investment is also boosted by the stellar overseas sales of chips, as the equipment investment index leaped 19.5 percent on-year in May on the back of a 41 percent jump in machinery investment.
However, a downbeat growth pace in manufacturing output overshadowed booming exports and investment.
All industry production for May gained 2.4 percent from a year earlier, slowing from a 3.5 percent rise in the previous month, as manufacturing production inched up 0.1 percent and its shipments fell 1.3 percent over the same period.
The manufacturing capacity utilization rate also fell to 71.4 percent in May, hovering below last year's average of 72.6 percent.
"Manufacturing production and shipments showed slow growth, pointing to an adjustment in the rapid improvement of economic activities that the country has experienced since the fourth quarter of last year," the KDI report said.
Moreover, private consumption has been in the doldrums for months despite a more than six-year high of consumer sentiment.
The retail sales index rose 1.6 percent on-year in May, slowing down from a 2.6 percent gain in April, while May's composite consumer sentiment index rose to 111.1 in June, marking the highest since January 2011, when the index stood at 111.4.
"Private consumption stagnated with retail sales staying at a low level, meaning that the improvement trend driven by exports has not stimulated overall domestic demand," the KDI's latest findings showed.
Source: Yonhap News Agency