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Weakening private spending putting drag on economic recovery: KDI

All News 12:00 August 07, 2018

SEJONG, Aug. 7 (Yonhap) -- South Korea's economic recovery is being hampered by weakening domestic demand, although exports remained relatively sound, a state-run think tank said Tuesday.

"Export growth has been maintained but domestic demand growth is weakening, putting a drag on the pace of economic improvement," the Korea Development Institute (KDI) said in its monthly evaluation of the country's economic conditions.

The think tank said exports remain relatively positive, led by semiconductors, while investments are stagnant and consumption improved only at a moderate pace, indicating that domestic demand is somewhat weaker.

The country's industrial output remained flat in June compared to the year earlier period, following a 1.6 percent on-year rise the previous month.

The retail sales growth rate slowed and consumer sentiment index fell, a sign that consumption growth is moderating.

Retail sales gained 4.0 percent in June from a year earlier, decelerating from the previous month's 4.5 percent on-year rise. The services production index gained 1.7 percent in June, compared with a 2.3 percent on-year rise the previous month.

Facility investment dipped 13.8 percent in June, accelerating from the previous month's 3.7 percent on-year decrease.

On the export front, June's outbound shipments increased 6.2 percent, compared with a 0.2 percent on-year fall the previous month.

The KDI also said that, despite the gains in a few service industries, growth in the total number of those employed remains weak on continued declines in manufacturing employment.

This image shows the KDI logo superimposed over photos of shipping containers and cars at a South Korean port. (Yonhap)


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