Economic recovery being maintained amid growing uncertainties: finance ministry

Published : Jul 13, 2018 - 11:33 Updated : Jul 13, 2018 - 11:53

South Korea's economy is on a recovery path on the back of a rebound in industrial output, although capital spending and consumption are facing adjustments and external uncertainties are on the rise, a government report said Friday.

A weaker job market, rate hikes in the United States and rising oil prices pose downside risks for Asia's fourth-largest economy, the finance ministry said in its monthly economic assessment report.

(Yonhap)

"The overall recovery pace is being maintained as industrial output rose for the second straight month," the ministry said. "But facility investment and private spending faced corrections, and uncertainties increased over trade conflict between the US and China," it added.

The report, called the "Green Book," is based on the latest economic indicators of such key factors as output, exports, consumption and corporate investment, which provide clues as to how the economy has been faring in recent months.

The country's overall industrial output rose 0.3 percent on-month in May, following the previous month's 1.5 percent on-month gain.

Retail sales declined 1 percent on-month in May, and facility investments dipped 3.2 percent in the month as well, according to the latest review.

South Korea's exports have been on a steep upside cycle since November 2016, led by a spike in global demand.

Outbound shipments jumped 13.5 percent in May from a year earlier, according to government data.

The finance ministry said last month that the country's economic recovery pace will be maintained on eased geopolitical risks, but the latest assessment highlighted increasing uncertainties stemming from growing trade spats between China and the US.

At home, there have been worries that Asia's fourth-largest economy may be entering a downward path.

Job creation has been hovering around 100,000 jobs per month for five straight months, with the manufacturing sector slashing 126,000 jobs in June following a reduction of 79,000 the previous month.

Consumer sentiment also deteriorated, with private spending suffering a slowdown.

"The implementation of fiscal spending will be accelerated to help bolster economic recovery and create more jobs," an official at the ministry said.(Yonhap)