The South Korean economy appears to have passed its nadir recently on the back of the recovery in the manufacturing sector, a state-run think tank said Sunday.
The assessment came after Asia’s fourth-largest economy saw its industrial output rise 1.3 percent in May from a month earlier, with retail sales and facility investment gaining ground as well.
“The Korean economy appears to be navigating its economic trough, with a partial easing in the downturn of the manufacturing industry,” the Korea Development Institute (KDI) said.
“The manufacturing industry shows signs of moderating its contraction, as evidenced by a slower decrease in production and exports, notably in semiconductors,” it added.
Exports of semiconductors, the country’s key export item, sank 28 percent on-year in June amid falling demand and a drop in chip prices. The drop, however, slowed from a 36.2 percent on-year decrease tallied a month earlier.
“The downturn in semiconductor production has been tapering off steadily since March, while export volume has taken a turn toward growth,” the KDI said.
In May, South Korea’s output in the mining, manufacturing, gas and electricity industries rose 3.2 percent on-month following the robust performance of the automobile and chip segments, which advanced 8.7 percent and 4.4 percent, respectively, separate data from Statistics Korea showed.
The KDI also noted that the job market remained “favorable,” with the service sector also posting moderate growth.
Last week, South Korea suggested the number of employed people was rising by 320,000 on-year each month, significantly up from the previous estimate of 100,000 announced in December.
The think tank, however, added that uncertainties still linger for the South Korean economy amid the prolonged monetary tightening moves from major countries, along with China’s delayed economic recovery.
Source: Yonhap News Agency