News ID: 255420
Published: 0212 GMT July 07, 2019

S. Korea's economy slowing on weak investment and exports

S. Korea's economy slowing on weak investment and exports
ANN HERMES/GETTY IMAGES

The South Korean economy is facing a slowdown on weakening investment and declining exports, a state-run think tank said Sunday.

"The Korean economy is exhibiting a slightly improved sluggishness in consumption but investment and exports have contracted, indicating that economic activities remain subdued," the Korea Development Institute (KDI) said in its English-language Monthly Economic Trends publication.

The report said June's exports declined sharply, led by semiconductors and petroleum products.

South Korea's exports fell 13.5 percent on-year to $44.18 billion in June, extending their on-year decline for the seventh consecutive month due mainly to a prolonged trade row between the US and China.

Hong Nam-ki, the minister of economy and finance, said last week that South Korea's exports in 2019 could fall by five percent from 2018, when outbound shipments hit an all-time high of $605.5 billion.

Retail sales rose 3.4 percent on-year in May due mainly to the increased number of foreign tourists to South Korea, according to the KDI.

It said investment in facilities and construction remained depressed, led by semiconductors and housing, respectively.

The South Korean economy, Asia's fourth-largest, unexpectedly contracted 0.4 percent in the first quarter of the year from three months earlier, marking the worst performance in a decade.

The Bank of Korea is set to further cut its growth outlook this month after cutting the estimate to 2.5 percent in April.

This week, the Finance Ministry also trimmed its 2019 growth outlook to between 2.4 percent and 2.5 percent due to weak exports and sluggish investment.

The government's latest estimate represents a drop from its previous forecast of between 2.6 percent and 2.7 percent in December.

 

 

   
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Resource: Economic Trends
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