Seoul: South Korea's economy continues to face downward pressure due to a delayed recovery in domestic demand and slowing exports, but there are some positive signs, such as improving consumer sentiment, the finance ministry said Friday. In its latest monthly economic assessment, known as the Green Book, the Ministry of Economy and Finance highlighted ongoing downside risks for the seventh consecutive month, citing weak consumer spending, sluggish construction investment, continued challenges in the labor market, and deteriorating export conditions.
According to Yonhap News Agency, the ministry slightly toned down its assessment by omitting the term "increasing" in reference to downside risks, suggesting a cautious shift in tone. "Despite persistent downward pressure from slowing exports and worsening external conditions due to U.S. tariffs, there are also signs of improvement, such as improving consumer sentiment," the report stated.
The ministry pointed to a recent improvement in certain consumer sentiment indexes, while expressing hope that the planned consumption coupons may help revitalize domestic demand in the coming months. In May, retail sales remained sluggish across most sectors. Sales of semidurable goods, such as clothing, fell 2 percent from the previous month, while durable goods, including home appliances, declined 1.4 percent, according to government data. On a yearly basis, overall retail sales edged down 0.1 percent.
The ministry noted that improving consumer sentiment and a rise in the number of Chinese tourists visiting South Korea could serve as positive factors for June's retail performance. The number of Chinese tourists to the country jumped 28.8 percent from a year earlier in June, while domestic credit card spending rose 4.5 percent.
The ministry earlier pledged to swiftly implement the recently approved supplementary budget and focus interagency efforts on the rollout of the consumption coupons aimed at boosting domestic demand and revitalizing local economies.