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Finance minister projects rosy outlook for private spending in Q4

Deputy Prime Minister and Finance Minister Hong Nam-ki (Yonhap)
Deputy Prime Minister and Finance Minister Hong Nam-ki (Yonhap)
Highlighting the latest government data reflecting a recovery in industrial output and retail sales in September, the nation’s top economic policymaker on Friday expressed anticipation of a rebound in private spending for the remaining months of the year.

“Despite the obstacles cast by the fourth wave of the COVID-19 virus, the nation’s industrial output in September rose over 1 percent and the overall economy activity has shown improvement compared with August,” Deputy Prime Minister and Finance Minister Hong Nam-ki wrote on his Facebook.

“While the central bank’s data on the economy showed that private spending shed 0.3 percent in the July-September period on-quarter, the spending has recovered greatly in September alone and the consumer sentiment index has rebounded alongside last month as well,” he added.

He explained that the improvement in private spending in September, will lead to a further rebound in spending in the last three months of the year.

Industrial output gained 1.3 percent in September on-month, compared with a 0.2 percent on-month decline in August, Statistics Korea data showed Friday. The figure gained 1.4 percent on-year.

Retail sales, a yardstick for private spending, improved in September amid the nation’s accelerating vaccination rate. It gained 2.5 percent on-month in September, compared with a 0.8 percent on-month drop in August.

The country‘s industrial output and retail sales saw gains for the first time since June.

In terms of quarterly performance, private spending fell 0.3 percent in the third quarter from on-quarter, a turnaround from a 3.6 percent on-quarter gain in the second quarter, recent data from the Bank of Korea showed.

The daily infection tally has moved in the quadruple digits since July 7, as of Friday, including the record high of 3,272 cases on Sept. 25 – the fourth wave of the virus continuing to hinder growth of Asia’s fourth-largest economy.

But with the nation’s accelerating vaccination rate, the government has been gearing up for the first phase of the “living with COVID-19” scheme in November, which will treat the virus like a common influenza and ease social distancing rules to basic measures.

About 41.03 million people, or 79.9 percent of the country’s 52-million population, has received their first COVID-19 vaccine shots as of Thursday. The number of fully vaccinated people came to 37.59 million, or 73.2 percent.

By Jung Min-kyung (mkjung@heraldcorp.com)
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