(LEAD) S. Korean economy remains sluggish on slowing exports: ministry

All News 11:48 October 18, 2019

(ATTN: UPDATES with comments by finance minister and background in paras 6-9)

SEJONG, Oct. 18 (Yonhap) -- The South Korean economy remains stagnant due to slowing exports and weak investment, the finance ministry said Friday.

"A sluggish trend persists in exports and investment, though overall industrial output is on the rise," the Ministry of Economy and Finance said in its monthly economic assessment report.

The report, called the "Green Book," is based on the latest economic indicators of such key factors as output, exports, consumption and corporate investment, which provide clues as to how Asia's fourth-largest economy has been faring in recent months.

South Korea's exports fell 11.7 percent on-year to US$44.7 billion in September, extending their on-year decline to a 10th consecutive month due to weak prices of semiconductors and the yearlong trade row between the United States and China.

Outbound shipments of chips declined 31.5 percent on-year to $8.5 billion in September, dealing a blow to South Korea, as semiconductors account for one-fifth of its exports.

Finance Minister Hong Nam-ki said a recovery of the semiconductor sector and the resolution of the Sino-U.S. trade dispute are keys to boosting South Korea's exports.

About 40 percent of South Korea's exports go to the United States and China -- South Korea's top two trading partners and the world's two largest economies.

Hong made the comments in separate meetings with senior officials from two major global rating agencies -- Standard & Poor's and Fitch Ratings -- on Thursday in Washington.

Hong is in Washington for the Group of 20 finance ministers and central bank governors' meeting, as well as meetings of the International Monetary Fund and the World Bank.

Retail sales rose 4.1 percent in August from a year earlier, while facility investment fell 2.7 percent during the same period.

The ministry said it will mobilize all policy tools to boost exports and investment amid uncertainties over an ongoing trade conflict between the United States and China and a trade row between South Korea and Japan.