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S. Korean exports grow rapidly amid lagging domestic recovery: KDI

By Yonhap

Published : April 7, 2024 - 19:02

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This photo shows a port in South Korea's southeastern city of Busan on April 1, 2024. (Yonhap) This photo shows a port in South Korea's southeastern city of Busan on April 1, 2024. (Yonhap)

South Korea's exports have grown rapidly, driven by the strong rebound in the semiconductor sector, though private consumption and investment remain weak, a state-run think tank said Sunday.

"The Korean economy is experiencing a moderate downturn, buoyed by rapid growth in exports, particularly from the IT sector," the Korea Development Institute (KDI) said in a monthly economic assessment report.

"But consumption remains weak, particularly in goods consumption, as financing conditions are not improving due to persistent high interest rates. Though equipment investment exhibited some positive signs, construction investment is now experiencing a slight moderation," the report read.

The latest assessment about exports was more positive than that made last month, but the institute pointed to weak domestic demand for five months in a row.

In March, exports, a key economic growth engine, rose 3.1 percent on-year on the back of strong chip sales, marking the sixth consecutive monthly increase.

Industrial output rose for the fourth consecutive month by going up 1.3 percent on-month in February thanks to increasing semiconductor production.

In an on-year term, the mining and manufacturing production rose 4.8 percent in February, as the output of semiconductors soared 65.3 percent from the previous year.

But construction orders received and building permit area, two leading indicators of the industry circumstances, continued to slide by a large margin, which indicates "a potential continuation of the slowdown in construction investment going forward," the KDI noted.

"External risk factors persist, such as the escalating international oil prices and transportation disruptions precipitated by geopolitical tensions," the report showed. (Yonhap)