The Ministry of Economy and Finance diagnosed that the downward pressure on the economy remains significant due to the delay in domestic recovery and the slowdown in exports, and prescribed that it would 'prepare a supplementary budget with urgency.'
In the 'Recent Economic Trends (Green Book) June Edition' announced on the 13th, the Ministry of Economy and Finance assessed the economic situation in Korea, noting, 'The recovery of domestic demand, such as consumption and construction investment, is delayed, and employment difficulties persist, especially in vulnerable sectors,' and stated that 'downward pressure on the economy, such as a slowdown in exports due to worsening external conditions from U.S. tariffs, remains.'
Regarding the external economic situation, it revealed, 'Due to the deterioration of trade conditions resulting from tariff impositions by major countries, there are concerns about continued volatility in international financial markets and a slowdown in trade and growth.' It added that it would focus on responding to trade risks, including support for our corporations affected by U.S. tariffs, while urgently preparing and promoting a supplementary budget for economic recovery, consumption revitalization, and support for vulnerable groups and small businesses.
Indicators of the major economy released last month reveal the poor state of the Korean economy.
In April, the main indicators of industrial activity showed that the impact of U.S. tariff barriers became evident, with a uniform decline across industrial production, consumption, and investment sectors. Industrial production in the mining and manufacturing sector fell by 0.9%, led by automobiles (-4.2%). The service sector (-0.1%) and construction sector (-0.7%) also declined, resulting in an overall industrial production decrease of 0.8%.
In the expenditure sector, retail sales dropped by 0.9%.
Facility investment decreased by 0.4%, and construction investment decreased by 0.7%. Compared to the same month last year, these two indicators fell by 8.4% and 20.5%, respectively.
However, the government noted that there are also positive factors such as improvements in the consumer sentiment index and rising corporate sentiment performance. The consumer sentiment index (CCSI) for May rose to 101.8, an increase of 8.0 points from the previous month, while the corporate sentiment index (CBSI) also increased by 2.8 points compared to the previous month.
Employment indicators show that the number of employed people increased by 245,000 in May, and the unemployment rate fell to 2.8%, a decrease of 0.2 percentage points compared to the same month last year. The consumer price inflation rate rose to 1.9%, with a reduced rate of increase.