The coincident index, which reflects the economic trend during former President Yoon Suk-yeol's tenure, has shown a continuous decline since peaking early in his term. Notably, following the declaration of a state of emergency at the end of last year, the decline has accelerated, recording the lowest level during Yoon's administration.
According to the Korean Statistical Information Service (KOSIS) on the 6th, the cyclical fluctuations of the coincident index for January this year dropped by 0.4 points to 98.4 compared to the previous month. This is the lowest figure since former President Yoon's inauguration in May 2022.
In February, there was a slight rebound of 0.1 points, but the government believes this is insufficient to reverse the three consecutive months of decline that began at the end of last year. Authorities are reporting that the current economic situation has not escaped the downward phase.
The cyclical fluctuations of the coincident index are a composite index that assesses the current economy based on seven indicators, including industrial production, service activity, retail sales, and the domestic export index. This index fell to 96.3 in May 2020 due to the impact of the COVID-19 pandemic, but rebounded thanks to fiscal spending and the easing of disease control measures, peaking at 101.6 in September 2022 before turning downward.
Although the economic trend seemed to improve slightly right after former President Yoon's inauguration, a downward trend began again less than half a year into his term. Subsequently, a low trend continued without recovery during his administration.
The biggest factor was the slowdown in the semiconductor market. The industrial production index, one of the components of the coincident index, decreased for 11 months starting from April 2022, exerting downward pressure on exports and overall production during that period.
Even after the semiconductor industry had hit bottom, domestic demand did not recover. The retail sales index showed a decline for eight months out of the year starting from May 2023, hindering the recovery of private consumption. This was exacerbated by poor construction performance. The construction output value decreased compared to the same period last year for 11 consecutive months starting from April last year, contributing to the decline in the coincident index.
The decline expanded further after the political uncertainties heightened at the end of last year. The coincident index, which maintained the 99 level until October last year, began to fall consecutively from November, dropping to 98.4 in January. This is the lowest level since the severe impacts of COVID-19 in 2020.
A government official noted that 'the coincident index has been on a downward trend since September 2022,' adding, 'There was a slight rebound in February, but it is still too early to consider it a reversal signal.'