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Korean economy plagued by weak demand: state-run think tank

All Headlines 12:00 September 08, 2019

SEJONG, Sept. 8 (Yonhap) -- The South Korean economy remains sluggish due to weak domestic demand and slowing exports, a state-run think tank said Sunday.

"The Korean economy remains stagnant on weakening internal and external demand," the Korea Development Institute (KDI) said in its English-language Monthly Economic Trends publication.

Retail sales edged down 0.3 percent in July from a year earlier, while facility investment fell 4.7 percent during the same period.

South Korea's exports plunged 13.6 percent on-year to US$44.2 billion for August, extending their on-year decline for the ninth consecutive month due mainly to the Sino-U.S. trade dispute and a prolonged drop in prices of semiconductors.

Outbound shipments of chips fell 30.7 percent in August from a year earlier, dealing a blow to South Korea, where semiconductors account for one-fifth of its exports.

South Korea -- home to Samsung Electronics Co., the world's largest memory chip maker, and its smaller rival SK hynix Inc. -- accounted for more than 60 percent of the global memory chip market in 2018.

South Korea's headline inflation remained unchanged at 0.0 percent in August from a year earlier. The reading marked the lowest since 1965, when the statistics agency started compiling data on consumer prices.

Core inflation -- which excludes food and energy -- rose 0.8 percent from a year earlier.

"Given that core inflation held a higher 0 percent range, a rebound is likely from late this year when temporary factors fade," the KDI said.

This file photo shows the Korea Development Institute's headquarters in Sejong, an administrative hub about 130 kilometers south of Seoul. (Yonhap)

entropy@yna.co.k
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