Despite a noteworthy recovery in the semiconductor sector, South Korea is experiencing a slight slowdown in domestic demand, specifically in private consumption and investment, as indicated by the Korea Development Institute (KDI) in its monthly economic assessment report.<\/p>\n
The report acknowledges that the economy has shown a \u201cslight slowdown in domestic demand\u201d but notes a gradual softening in the downturn, largely attributed to the resilience of the semiconductor industry. The semiconductor sector has played a pivotal role in stabilizing the economy, even as other segments experience deceleration.<\/p>\n
Private consumption and investment are facing challenges influenced by persistently high-interest rates. The KDI emphasizes that this has led to a deceleration in both employment growth and inflation. However, the report highlights that exports are exhibiting a recovery, serving a crucial function in offsetting the economic slowdown.<\/p>\n
For the first time in nine months, the KDI has pointed out weak domestic demand in its December report. Retail sales in November, a key indicator of private spending, inched down by 0.3 per cent year-on-year, improving from a 4.5 per cent fall the previous month. The institute notes that this improvement is primarily due to temporary factors, such as major discount events and a low-base effect.<\/p>\n
Despite the overall recovery, the service sector\u2019s output remains sluggish, with the accommodation and food service sector witnessing a 3.3 per cent decrease, and the wholesale and retail trade decreasing by 1.5 per cent.<\/p>\n
Facility investment continues to be subdued, influenced by high semiconductor inventories and persistently high-interest rates. Inflation, reflecting weak domestic demand, moderated to 3.2 per cent year-on-year in December, down from 3.3 the previous month.<\/p>\n
The KDI acknowledges the positive role of exports in the economic recovery, with solid sales in the semiconductor and automobile sectors driving a 5.1 per cent year-on-year growth in exports in December. While exports experienced a yearlong downtrend, they have shown on-year monthly gains since October of the previous year.<\/p>\n
Despite the challenges, the government anticipates a robust rebound in exports, projecting an 8.5 per cent growth in 2024 to surpass US$700 billion, marking a record high.<\/p>\n","protected":false},"excerpt":{"rendered":"
South Korea is grappling with a mild deceleration in domestic demand, particularly in private consumption and investment, attributed to elevated interest rates. <\/p>\n","protected":false},"author":369,"featured_media":7818,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[5085,1330,5086,5089,5088,5087,603],"class_list":["post-7816","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-south-korea","tag-domestic-demand","tag-economy","tag-export-recovery","tag-high-interest-rates","tag-kdi","tag-semiconductor-industry","tag-south-korea"],"reading_time":"2 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/7816","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/users\/369"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/comments?post=7816"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/7816\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media\/7818"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media?parent=7816"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/categories?post=7816"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/tags?post=7816"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}