SEOUL: Domestic demand in South Korea has remained weak, resulting in limited recovery in overall economic growth despite robust exports, a state-run think tank reported on Wednesday. "The Korean economy maintains favorable export momentum, led by ICT products, yet domestic demand recovery is constrained by sluggish construction investment," the Korea Development Institute (KDI) said in its monthly economic assessment report. "The Korean economy shows limited improvement," it added. The think tank has noted weak domestic demand since late last year.According to Yonhap News Agency, exports in South Korea rose 4.6 percent year-on-year to reach US$57.5 billion in October, marking the 13th consecutive monthly gain, driven by strong chip sales, as per government data. However, retail sales, an indicator of private spending, decreased by 0.4 percent from the previous month in September, following a 1.7 percent growth in the preceding month. On a year-on-year basis, retail sales fell by 2.2 percent, marking the se venth straight monthly decline.Facility investment saw a significant rise of 8.4 percent on-month, rebounding from a 5.1 percent decline in August. Compared with the previous year, facility investment advanced by 6.1 percent. Conversely, construction investment fell sharply by 12.1 percent year-on-year, with a slight 0.1 percent on-month decrease in September. The report highlighted, "Despite the upward trend in equipment investment, the sustained weakness in goods consumption and construction investment continues to constrain domestic demand recovery."During the July-September period, private spending rose by 0.5 percent on-quarter, recovering from a 0.2 percent on-quarter decline in the preceding quarter, according to data from the Bank of Korea.
- October 12, 2026
