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Finance Ministry warns of growing economic uncertainty

With a new wave of coronavirus infections gripping the nation, South Korea’s economy this month faces growing uncertainties, the Ministry of Economy and Finance said Friday.

In its monthly economic report, called the “Green Book,” the ministry has upgraded its concerns on Asia’s fourth-largest economy by a notch, saying that the uncertainties are “expanding.” It has previously said that the uncertainties were “continuing” in the reports released in recent months.

“Despite a steady recovery of exports due to a resurgence of COVID-19 since mid-November and stricter social distancing rules, uncertainties surrounding the nation’s real economy, especially domestic consumption, has been expanding,” the report said.

But at the same time, the latest news of vaccine approvals has been fueling the anticipation of an economic recovery, it added.

Reflecting the ministry’s worries on weakened domestic consumption, monthly department store sales fell 3.9 percent on-year in November, while those of discount stores shed 4.3 percent in the same period.

Sales from online shopping increased 21.8 percent on-year -- as consumers have been turning to contactless shopping amid the pandemic -- but the gain was smaller compared with the corresponding figure of 26.6 percent in October.

The number of Chinese tourists visiting Korea declined 98.1 percent on-year in November. It dropped by 97.8 percent on-year the previous month.

Amid reports of lackluster figures tied to domestic consumption, domestic sales of cars manufactured here grew 7.7 percent on-year in November, a vast improvement compared with the October reading of minus 0.4 percent.

The consumer sentiment index came to 97.9 in November, which was the highest since January, when the reading was 104.2. However, a ministry official explained that the resurgence of the virus was yet to be reflected in the index and that the ministry expects the figure to worsen this month.

The number of employed people fell by 273,000 on-year last month, an improvement from the October figure of 421,000. The unemployment rate climbed 0.3 percentage point on-year to 3.4 percent in the cited period.

Exports, meanwhile, increased 4.1 percent on-year, indicating a recovery in the nation’s outbound shipments - which account for more than half of the economy - amid the pandemic.

On the nation’s financial market, the ministry said that the stock market had been on a rally due to the anticipations surrounding the COVID-19 vaccine. The won-dollar exchange rate has fallen over the effects of a weakened dollar trend, it added. 

On Friday, South Korea added 1,062 more COVID-19 cases, including 1,036 local infections, raising the total caseload to 47,515, according to the Korea Disease Control and Prevention Agency. It marked the first time that the daily number has stayed above 1,000 for the third consecutive day.

By Jung Min-kyung (