Seoul: The finance ministry on Tuesday signaled that it may raise its growth forecast for the country's economy by 0.1 percentage point to 1 percent for this year, citing an expansion in economic activity. The announcement came after central bank data showed the economy grew at its fastest pace in 1 1/2 years in the third quarter, supported by strong exports and rising private consumption.
According to Yonhap News Agency, the finance ministry revealed that private consumption rose at its fastest pace in three years since the third quarter of 2022. This increase was attributed to improved consumer sentiment and policy measures such as "consumption coupons," which are essentially cash handouts. Facility investment also showed improvement, particularly in the machinery sector, amid a solid semiconductor industry, while construction investment rebounded from previous weakness.
The ministry further noted that imports of machinery, equipment, and automobiles increased by a combined 1.3 percent, highlighting a recovery in domestic demand. It emphasized that exports remain solid and credited fiscal policy as playing a significant role in helping the private sector lead the recovery. Despite ongoing uncertainties, including tariff negotiations with the United States and U.S.-China relations, the likelihood of achieving a 1 percent growth rate has increased, according to Kim Jae-hoon, a ministry official.