South Korea’s economic recovery continues, but escalating geopolitical tensions in the Middle East pose significant downside risks, according to the Ministry of Finance on Friday.
The Ministry of Economy and Finance released its monthly economic assessment, the Green Book, maintaining its description of the nation’s economy as being in a state of “recovery” for the fifth consecutive month.
“The South Korean economy is currently experiencing a continued recovery trend, bolstered by strengthening domestic demand, particularly in consumption, and robust exports spearheaded by the semiconductor industry,” the report stated.
However, the ministry cautioned about persisting uncertainties, including ongoing challenges in the employment sector, specifically within vulnerable industries like construction.
The report highlighted geopolitical risks, particularly the escalating global oil prices influenced by the evolving situation in the Middle East.
It clarified that the latest economic indicators have not yet fully reflected the potential impact of the Middle East crisis.
Retail sales witnessed a 2.3 percent increase in January compared to the previous month, with growth observed across durable goods, semi-durable goods, and non-durable goods categories.
Projections for February suggest further growth in retail sales, driven by an accelerated increase in domestic credit card spending and improving consumer confidence.
Exports, primarily driven by semiconductors, sustained their upward trajectory.
In February, outbound shipments surged by 28.7 percent compared to the same period last year. The average daily export value, adjusted for working days, saw a substantial increase of 49 percent.
Moving forward, the government announced its intention to promptly formulate a supplementary budget aimed at supporting livelihoods and promoting economic recovery, while mitigating the potential repercussions of the Middle East situation on the Korean economy.
