The South Korean economy is currently in an expansionary stage that is notable for being very long and sluggish, the parliamentary budget office said Monday.
The report by National Assembly Budget Office based on various official coincident composite and cycle of coincident indices, showed Asia's fourth-largest economy hit bottom in early 2013 and has been making a comeback ever since.
"The economy has effectively expanded for 52 months as of July," NABO said. It added this is the longest economic expansion since the country started compiling such data in March 1972.
It, however, said the ongoing growth is very gradual resulting in weak economic expansion.
The parliamentary office added one reason for the weak expansion has to do with the country being exposed to external and internal shocks. These include such events as the sinking of the Sewol ferry in 2014 that left over 300 dead, the Middle East Respiratory Syndrome outbreak in the following year and extreme difficulties experienced by local shipyards and shipping lines in 2016, that caused temporary shock waves and affected consumer sentiment and spending.
In addition, the latest findings showed that there has been a weakening of links between government policy measures to bolster the economy and actual growth.
"Measures to fuel construction investment growth did not lead to overall economic growth and efforts to cut consumption tax rates, while helpful in getting retail spending up, did not spill over into the service sector that restricted its overall effectiveness," NABO said.
The office said that with industries undergoing rapid change it is imperative for the country to keep pace with developments and support those sectors that can have the greatest impact on growth moving forward. (Yonhap)