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Economic recovery gathers pace in South Korea on signs of rising domestic demand: finance ministry

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 A bustling street in Seoul's Myeongdong, June 5. Yonhap

A bustling street in Seoul's Myeongdong, June 5. Yonhap

The economic recovery in South Korea has gathered pace on robust exports and recovering domestic demand, though external uncertainties continued over varying economic growth among nations and regional conflicts, the finance ministry said Friday.

The Ministry of Economy and Finance made the assessment in the Green Book, its monthly economic assessment report, vowing to prioritize measures meant to stabilize the livelihoods of the people and manage potential risks while striving to spur growth momentum.

"The South Korean economy has been showing signs of expanding recovery momentum amid a gradual moderation in inflationary pressures driven by the manufacturing sector and robust exports," the report read.

"The country has also seen signs of a recovery in domestic demand as the number of foreign tourists is growing and the service sector has improved," it added.

But the ministry said uncertainties linger in the global economy, as the recovery pace of major economies differs and geopolitical concerns continued over the Russia-Ukraine war and the Middle East crisis.

It also cited stronger trade regulations as a major headwind.

"The government will put our primary focus on achieving a stable inflation level and boosting private consumption to ensure stability in the people's livelihoods," the ministry said.

Exports, a key economic growth engine, rose 11.7 percent on-year to US$58.1 billion in May, the eighth consecutive monthly gain on the back of strong global demand for semiconductors, among other items, according to government data.

Industrial output rose 1.1 percent on-month in April, or 3.1 percent on-year, as manufacturing, service and construction output all logged growth.

But retail sales, a gauge of private spending, shed 1.2 percent on-month in April. On an on-year basis, retail sales fell 2.6 percent.

Facility investment inched down 0.2 percent on-month in April.

Consumer price growth, a key gauge of inflation, stayed below 3 percent for the second consecutive month in May to come to 2.7 percent.

The country is projected to reach the target rate of 2 percent by around the end of this year, though inflationary pressure is forecast to ease at a slower pace than earlier expected, the ministry has said. (Yonhap)



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