Foreign
THE South Korean economy saw a continued slump on the back of export fall and fast interest rate hikes, a state-run think tank said on Wednesday.
The Korea Development Institute (KDI) said in its monthly economic report that the economy continued to be sluggish recently as domestic demand slowed amid the shrinking export.
The KDI noted that the manufacturing industry has become weakened due to faltering exports caused by worsened external conditions.
It said the effect of rate hikes gradually spread to undermine consumption and construction investment.
The country’s export diminished by 7.5 per cent in February from a year earlier, keeping a downward trend for the fifth consecutive month.
The average daily shipment tumbled 15.9 per cent last month.
Affected by the export reduction, output in the mining and manufacturing industry retreated 12.7 per cent in January from a year earlier.
Semiconductor production plunged 33.9 per cent in the month.
Domestic demand was negatively influenced by the rapid interest rate hikes from the central bank, which raised its key rate by 3.0 percentage points in steps to 3.50 per cent since August 2021.
Retail sales, which reflect private consumption, reduced by 2.1 per cent in January from the previous month.
This shows a downward trend for the third successive months.
Facility investment declined 3.9 per cent in January a year earlier, but completed construction then added 0.9 per cent.
The KDI noted that the recovery of construction investment would be restricted by the sharp fall in housing.
The shortfall to start and building permits dropped 17.2 per cent and 45.9 per cent each in January from a year earlier. (Xinhua/NAN)
KN
Tags: Korea Development Institute
