Ministry of Strategy and Finance announces October issue of ‘Recent Economic Trends (Green Book)’
Diagnosis of signs of domestic demand recovery continues… KDI and temperature difference
“‘Solid’ trend falling due to slight minus in manufacturing industry”
The government has emphasized the export-centered economic recovery for the past six months. While domestic demand is still showing signs of recovery and showing differences in speed across sectors, it was diagnosed that price stability has expanded due to the consumer price increase rate falling to the 1% level for the first time in 42 months.
In the October issue of ‘Recent Economic Trends (Green Book)’ released on the 18th, the Ministry of Strategy and Finance said, “Recently, our economy is experiencing an economic recovery trend centered on exports and manufacturing, amidst expanding price stability,” and “Focusing on facility investment and service industries.” “Amid signs of a gradual recovery in domestic demand, there are differences in speed across sectors,” he said.
Continuing from last month, the assessment of ‘economic recovery centered on exports and manufacturing’ was maintained, but the word ‘robust’ was excluded.
Kim Gwi-beom, head of the economic analysis department at the Ministry of Strategy and Finance, said, “In the economic recovery trend centered on exports and manufacturing, which was solid last month, the modifier ‘solid’ has been omitted this month.” He added, “If you look at the manufacturing industry combined in July and August, it is still recording a slight minus (-). “It was burdensome to use the word ‘solid’ because there was no recovery,” he said.
The assessment of ‘signs of gradual domestic demand recovery’ was maintained. He also continued to mention the ‘speed difference between sectors’ between domestic demand and exports and explained that the boom in exports is not leading to domestic demand.
The government’s diagnosis of ‘signs of domestic demand recovery’ has continued for half a year. The Korea Development Institute (KDI) diagnosed through ‘October Economic Trends’ that “Recently, exports have continued to trend well in our economy, but economic improvement appears to be limited due to the delay in the recovery of domestic demand, centered on construction investment.” Negative evaluations continued throughout this year.
Manager Gwi-beom Kim explained, “KDI’s figures are the same as ours, with domestic demand gradually improving as the second half of the year progresses.”
Last August, retail sales increased by 1.7% compared to the previous month, but the Consumer Sentiment Index (CSI) in September decreased by 0.8 points compared to the previous month. Facility investment decreased by 5.4% compared to the previous month, and construction investment also decreased by 1.2% compared to the previous month.
In the production sector, overall business production increased by 1.2% due to increases in mining and service production, but the construction sector continued to perform poorly, recording -1.2%.
Accordingly, among the employed in September, the construction industry also decreased by 100,000, the largest decline ever since it was revised to the 10th industrial classification in 2013.
The coincident economic index (cyclical fluctuation value) and leading index (cyclical fluctuation value) each decreased by 0.1 point compared to the previous month.
Regarding the economic situation in September, Manager Kim Gwi-beom said, “Clothing sales seem to have slowed down a bit, but I think it will have a positive effect as iPhones and cars are sold a little more.” He also added, “In terms of facility investment, the introduction of semiconductor equipment and automobile imports look good, so there is a decrease in aircraft sales.” “Even if adoption decreases slightly, it doesn’t look bad,” he explained.
Manager Kim said, “The service industry is expected to do well due to number portability due to the iPhone along with Chuseok holiday products.” However, regarding exports, he predicted, “There will be no significant change in volume, but there will be an impact such as base effect.”
[세종=뉴시스]
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