"Korean economic slump eases as consumer sentiment recovers"

Korea Economic Daily

Summary

The Korea Development Institute assessed that the weakness in the Korean economy is easing as consumer sentiment recovers.
It said that due to the government's consumption support policies and falling market interest rates, the weakness in retail sales and the service sector is easing.
However, it noted that downward pressure on exports remains high due to U.S. tariff policies and global trade uncertainties.

KDI September economic trends

The Korea Development Institute (KDI) said on the 9th in its 'September economic trends' that "the construction sector remains weak, but consumer sentiment is reviving and the Korean economy is recovering." It pointed out that the possibility of exports declining due to U.S. tariff policies is a variable.

KDI analyzed that construction investment remains sluggish, and that as of July the manufacturing operating rate was 72.4%, lower than last year's annual average (72.7%). However, it assessed that consumption has returned to a recovery trend thanks to falling market interest rates and the government's consumption support policies. KDI explained, "In particular, the increase in retail sales closely related to goods consumption is widening," and "In service consumption as well, the weakness is easing centered on major sectors such as accommodation and restaurants." It added, "With government policies such as livelihood recovery consumption coupons and the appliance refund program being implemented, the August consumer sentiment index (111.4) also showed a high level."

However, it analyzed that high U.S. tariffs continue, and as global trade uncertainties remain, downward pressure on exports is still high. KDI pointed out, "The effects of U.S. tariff increases are taking hold," and "Uncertainty remains over whether semiconductor tariffs will be imposed and the timing of any reduction in automobile tariffs."

Reporter Nam Jeong-min peux@hankyung.com