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Economic slowdown persists on weak exports, biz sentiment: finance ministry

Economy 10:00 March 17, 2023

By Kang Yoon-seung

SEOUL, March 17 (Yonhap) -- South Korea's finance ministry said Friday that Asia's No. 4 economy continues to experience an economic slowdown amid sluggish exports and weak business sentiment.

"While the inflation has slowed recently, the recovery in domestic consumption has become moderate. With exports remaining sluggish and manufacturers' business sentiment contracting, the trend of an economic slowdown has continued," the Ministry of Economy and Finance said.

It marked the second consecutive month for the ministry to mention an economic slowdown in its monthly assessment report, the Green Book.

Cranes unload containers from a ship at Busan Port in the southeastern city of Busan on March 10, 2023. (Yonhap)

Cranes unload containers from a ship at Busan Port in the southeastern city of Busan on March 10, 2023. (Yonhap)

In late February, the Bank of Korea kept the benchmark interest rate unchanged at 3.5 percent amid concerns that aggressive monetary tightening could hurt economic growth. It marked the first freeze after seven straight months of increases meant to tame inflation.

Last month, South Korea's on-year growth in consumer prices fell below 5 percent for the first time in 10 months to 4.8 percent as global crude oil and local agricultural products' prices stabilized.

South Korea's exports, however, dropped for the fifth consecutive month in February due mainly to weak global demand for semiconductors. This is also the first time since 1997 that the country has logged a trade deficit for 12 months in a row.

Retail sales, a gauge of private spending, decreased 2.1 percent in January from a month earlier due to the weaker demand in all sectors.

The ministry added uncertainties for the global economy continued amid concerns over the negative impacts of monetary tightening moves, coupled with deepening woes over a prolonged war between Russia and Ukraine.

The market, however, also continued to express hope over the reopening of the Chinese economy, the finance ministry added. China is the biggest trading partner of South Korea.


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