The South Korean economy has remained in the doldrums due to weak exports and production stemming from waning global demand, despite a slight recovery in domestic consumption, a government report showed Wednesday.
"Amid a delayed recovery of the world economy, faltering exports and production have dragged down the South Korean economy," the finance ministry said in its monthly economy assessment report called "Green Book."
"But domestic demand, including private consumption, has been in a favorable mode."
The report is based on the latest economic indicators of such key factors as output, exports, consumption and corporate investment that could provide clues as to how the economy has been faring in recent months.
Recent data showed that output of the mining and manufacturing sectors fell 1.3 percent on-month in April, as sluggish exports pulled down production of key industries, including cars and ships.
The country's outbound shipments fell 6 percent in May from a year earlier, extending its negative run to a record 17 straight months. But the decline narrowed from an 11.2 percent plunge in April on the back of a rise in business days.
The central bank said the country's gross domestic product (GDP) expanded 0.5 percent from the previous quarter, slowing from a 0.7 percent on-quarter expansion three months earlier.
The domestic front, however, is showing some positive signs to offset the downturn of the production and exports sides, the ministry noted.
Retail sales fell 0.5 percent on-month in April but moved up 4.2 percent on-year on the back of the brisk sales of passenger cars. In March, retail sales rose 4.3 percent on-month and 5.7 percent on-year.
Production of the service industry rose for three months in a row to edge up 0.5 percent on-month in April.
The South Korean government revived an excise tax cut program on cars earlier this year in order to boost private consumption and the entire economy in the end.
Private consumption is expected to continue its upside mode in May, given that latest data showed that monthly sales by domestic automakers and department stores gained ground last month, said the ministry.
"Domestic consumption has been leading the growth momentum in the economy for the recent months," the report said. "But there are downside pressures, as household and corporate sentiments are still low, and external risks (still exist), including a possible U.S. rate hike and a potential British withdrawal from the eurozone." (Yonhap)
