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Economic recovery momentum slows down amid flare-up in COVID-19 cases: KDI

Finance 12:00 December 07, 2020

SEOUL, Dec. 7 (Yonhap) -- South Korea's economic recovery momentum is slowing down due largely to a resurgence in new coronavirus cases, despite improving exports, a state-run think tank said Monday.

The country's manufacturing sector sustained a moderate recovery on improving exports, but the service sector remained sluggish due to a flare-up in COVID-19 cases, according to a monthly economic assessment report by the Korea Development Institute (KDI).

"Despite a recovery in the manufacturing industry owed to improvements in overseas demand, the Korean economy is continuing to slow due to the rapid resurgence of COVID-19," the English-language report showed.

Economic recovery momentum slows down amid flare-up in COVID-19 cases: KDI - 1

The country's exports grew 4 percent in November on-year on the back of strong sales of chips, rebounding for the first time in two months.

The South Korean economy grew at a faster-than-estimated pace of 2.1 percent in the third quarter from three months earlier on robust exports.

But the country's consumption and investment declined in October from a month earlier, in a sign that economic recovery still remains weak amid the pandemic. The nation's industrial output remained flat on-month in October.

The data came after the country's industrial output, consumption and investment returned to growth in September following monthslong slumps amid the COVID-19 pandemic.

The KDI said the country's economic activity appears to be losing vitality to some degree, primarily led by slumps in the service sector, amid an uptick in virus cases and tougher social distancing measures.

South Korea reported 615 more COVID-19 cases, including 580 local infections on Monday, raising the total caseload to 38,161.

The daily number of new virus cases surpassed 600 for the second straight day, spawning concerns that the country is in the midst of a third wave of the pandemic.

The country decided Sunday to raise anti-virus curbs to Level 2.5, the second-highest in its new five-tier scheme, in the greater Seoul area for three weeks, effective from Tuesday.

sooyeon@yna.co.kr
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