The government evaluated that "downward pressure on the economy has increased" for the fourth consecutive month. In particular, it noted the deterioration of external conditions due to the U.S. tariff imposition, stating that "downward pressure has increased more than last month."
The Ministry of Economy and Finance diagnosed in its 'Recent Economic Trends in April (Green Book)' released on the 11th that "our economy is experiencing delays in domestic recovery in consumption and construction investment, with ongoing employment difficulties in vulnerable sectors, and downward pressure on the economy has increased due to the deterioration of external conditions stemming from U.S. tariffs."
The government's economic assessment changed sharply after the state of emergency involving former President Yoon Suk-yeol in December last year. At that time, the government revised its diagnosis of 'economic recovery' to 'increased concerns about downward risks in the economy.' Since January this year, it has evaluated that "downward pressure on the economy has increased" for four consecutive months.
The government reflected political and diplomatic situations, including the reciprocal tariff measures by U.S. President Donald Trump and the impeachment trial of former President Yoon Suk-yeol, in its economic diagnosis. The phrase 'expansion of domestic and external uncertainties' from last month's Green Book was deleted this month. The government adjusted the wording to state, "The global economy is facing worsening trade conditions due to tariffs imposed by major countries, raising concerns about increased volatility in international financial markets and slowing trade and growth."
Director Cho Sung-joong of the Ministry of Economy and Finance noted, "The wording was adjusted in consideration of the domestic political schedule and future procedures, as well as U.S. tariff impositions," adding that "external uncertainties are having a greater impact than domestic uncertainties." He continued, "Recently, the U.S. has suspended reciprocal tariffs for 90 days, but the 10% tariffs and tariffs on steel and automobiles are still being applied, so external conditions have worsened."
The government also deleted references to the slowing growth in exports in this month's Green Book. This is because exports have increased for two consecutive months compared to the same month last year. In March, exports increased by 3.1% compared to the same month last year, and the average daily exports also grew by 5.5% year-on-year.
The government believes there is also significant uncertainty regarding future consumption. The consumer sentiment index for March was 93.4, down 1.8 points from the previous month. When this index falls below 100, it indicates negative consumer sentiment regarding the overall economy.
Director Cho stated, "While alleviating political uncertainties positively impacts consumer sentiment, uncertainties related to tariffs, such as those imposed by Trump, can affect consumer confidence, leaving both upward and downward risks open."
The financial market situation is also not favorable. In March, the stock index of the securities market fell by 2.04% from the previous month, while the KOSDAQ market dropped by 9.56%. The won to dollar exchange rate recorded 1,484.1 won on the 9th, the highest level since the financial crisis, due to the intensification of the U.S.-China tariff war, but has slightly declined to the 1,450 won range.
However, employment and prices showed stable conditions. Last month, the number of employed persons increased by 193,000 compared to the same month last year, surpassing the increase in the number of employed persons in January and February (each around 130,000). The consumer price index for March rose by 2.1% year-on-year, while the core inflation index, excluding food and energy, increased by 1.9% compared to the same month last year, showing stability.
Meanwhile, the government plans to devote its efforts to responding to trade risks by swiftly promoting a supplementary budget essential for supporting domestic corporations affected by U.S. tariffs and enhancing industrial competitiveness. It also plans to continuously implement policies aimed at strengthening the recovery of the economy for job creation, construction, and support for small businesses.