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Slump in domestic demand eases amid pandemic: finance ministry

This file photo, taken April 5, 2021, shows people visiting Lotte Department Store in central Seoul during its spring sales discount event. (Yonhap)
This file photo, taken April 5, 2021, shows people visiting Lotte Department Store in central Seoul during its spring sales discount event. (Yonhap)
The South Korean economy is on a recovery track as exports remain robust and a slump in domestic demand has gradually eased amid the pandemic, the finance ministry said Friday.

In its monthly economic assessment report, the government presented a more positive assessment about private consumption, compared with March, when it said domestic demand had suffered extended sluggishness.

"While the country's exports and the manufacturing sector have extended improvements, slumps in domestic demand have gradually eased and the country reported job additions," the Ministry of Economy and Finance said in the Green Book.

Asia's fourth-largest economy is on a recovery path on the back of brisk exports of chips and autos.

Exports, which account for half of the country's economy, increased 16.6 percent on-year in March to extend their gains for the fifth straight month.

The country's industrial output grew at the fastest pace in eight months in February due largely to robust overseas shipments.

"The country's exports and investment have been improving faster than expected amid the global economic recovery. This has a positive effect on domestic demand, helping consumer sentiment rise," Kim Young-hoon, a senior official, said at a press briefing.

The domestic use of credit cards grew 20.3 percent on-year in March, marking the second straight month of gains and the fastest rise since January 2017.

Sales at department stores jumped 62.7 percent last month, the fastest gain since 2005, when the ministry began monitoring.

The country also reported the first job additions in 13 months in March in the latest sign that the job market is recovering after a yearlong slump caused by the COVID-19 pandemic.

Last month, the consumer prices grew at the fastest pace in 14 months on higher prices of farm and oil products, indicating that inflationary pressure is building up amid an economic recovery.

The Bank of Korea (BOK) froze the key rate at a record low of 0.5 percent Thursday to support the economic recovery amid a potential new wave of COVID-19 infections.

BOK Gov. Lee Ju-yeol said the growth pace of the Korean economy for this year is expected to be higher than the central bank's forecast of 3 percent.

The finance ministry said the rollout of COVID-19 vaccines raised hopes for a global economic recovery, but concerns linger over a flare-up in virus cases and growing inflation risks across the world. (Yonhap)
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