Seoul: The South Korean economy is experiencing "increasing downward pressure" as heightened uncertainties both domestically and internationally contribute to weakened economic sentiment and a slowdown in employment, the finance ministry reported on Friday. In its monthly economic publication, the Green Book, the Ministry of Economy and Finance highlighted these concerns for the second consecutive month, following President Yoon Suk Yeol's brief declaration of martial law on December 3.
According to Yonhap News Agency, the report emphasized that the economy is currently grappling with increased challenges to growth and employment, driven by expanded uncertainties. This assessment builds upon the December report, which first underscored the downward pressure. In November, the ministry had already signaled a shift from "recovery" to "gradual recovery" in its language, indicating growing concerns.
The finance ministry noted that while the global economy shows signs of recovery, geopolitical risks continue to fuel uncertainties within the trade environment. In response, the government is actively working to maintain South Korea's credibility by promoting coordination through economy-related ministers' meetings.
The report also revealed that South Korea experienced a decline of 52,000 jobs in December compared to the previous year, marking the first on-year employment decrease in nearly four years. This is a stark contrast to the 120,000 jobs added in the preceding month. Additionally, consumer prices, a key indicator of inflation, increased by 1.9 percent year-on-year in December, marking the fourth consecutive month of inflation remaining within the 1 percent range.
The economic report also highlighted a 0.4 percent decline in industrial output for November, marking the third consecutive month of decline. In contrast, retail sales saw a 0.4 percent increase over the same period, rebounding after two months of decline. However, facility investment experienced a significant drop in November, falling by 1.6 percent from the previous month, primarily due to challenges in the machinery sector, as noted in the report.