S. Korea says downside risks to economy slightly recede

South Korea's finance ministry said Friday that downside risks to the nation's economy have slightly receded but warned that risks of global recession have weighed on an economic recovery.

In a monthly report, called the "Green Book," the Ministry of Economy and Finance painted a somewhat positive picture of the economy, compared with its May report.   

"With a decline in domestic consumption showing signs of easing and employment indices recovering, downside risks to our economy have slightly receded," the report said.

"However, worries about global economic recession are growing as risks increase in major economies," it said.

The nation's jobless rate surged to a 10-year high in May as the coronavirus pandemic hammered job markets. The number of employed people fell by 392,000 to 26.93 million in May, marking the third consecutive monthly decline.

In a sign of hope for job markets, the pace of job losses eased in May. South Korea lost about 467,000 jobs in April, marking the sharpest monthly decline in more than 21 years.

Consumer sentiment rebounded from an 11-year low in May, mainly due to a decline in the number of new coronavirus infection cases here.

The country's composite consumer sentiment index came to 77.6 in the month, up 6.8 points from a month earlier when the index dropped to the lowest level since December 2008.

The Organization for Economic Cooperation and Development (OECD) has predicted that South Korea's economy could shrink 1.2 percent this year as the global economy is expected to have its worst year since the Great Depression of the 1930s due to the pandemic.

The world economy is expected to contract 6 percent this year, the OECD said. (Yonhap)