South Korean Economy’s Slowdown Appears to be Easing


By Kang Yoon-seung

SEOUL, Aug. 7 (Yonhap) — According to a state-run think tank, the slowdown in the South Korean economy appears to be gradually moderating as a result of an impending recovery in the chip industry.

Data from Statistics Korea showed that the inventory of semiconductor products dropped 12.3 percent in June, while their shipments increased 41.1 percent.

The Korea Development Institute (KDI) noted that business sentiment indices are improving, with evidence of a waning decline in semiconductor production. This is evidenced by the rising shipment and inventory indices, as well as a surge in export volume.

This file photo shows containers being unloaded at a port in Busan, 320 kilometers south of Seoul, on July 25, 2023. (Yonhap)

South Korea’s chip exports decreased 33.6 percent year-on-year in July to $7.44 billion. Despite this, the country’s job market in the service sector remains strong, with inventories in the manufacturing sector also declining.

In June, South Korea’s industrial output, private spending and investment rose for the second consecutive month, with inventories in the manufacturing sector falling 6.2 percent month-on-month, the sharpest drop since 1975.

Nevertheless, the KDI warned of remaining uncertainties for the South Korean economy, such as rising raw material costs and the slower-than-expected recovery of the Chinese economy. Additionally, global grain prices have increased due to the prolonged Russia-Ukraine war, as well as unfavorable weather conditions.

“Amid the ongoing sluggishness of global manufacturing, China seems to be experiencing increased downside risks, primarily centered around its real estate market,” it added.

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