The Ministry of Economy and Finance diagnosed that the downward pressure on the economy remains, but positive signs such as improved consumer sentiment are emerging. Domestic consumer sentiment has entered a recovery phase after overcoming the sluggishness at the beginning of the year following the inauguration of the new government.
The Ministry of Economy and Finance stated in its 'Recent Economic Trends (Green Book) July Issue' released on the 18th that "the recovery of domestic demand such as consumption and construction investment is delayed, and employment difficulties continue, especially in vulnerable sectors, while external conditions are deteriorating due to U.S. tariff impositions, leading to concerns about export slowdowns and continued downward pressure on the economy." However, it noted that "positive signs such as improved consumer sentiment are emerging."
The consumer sentiment index for June was 108.7, an increase of 6.9 points compared to the previous month. When the consumer sentiment index exceeds 100, it indicates that consumers' subjective expectations for the economic situation are more optimistic than the long-term average from 2003 to 2023.
In the consumer barometer surveyed by the Organisation for Economic Co-operation and Development (OECD), Korea recorded 0.81, the highest figure among the 33 countries surveyed. The consumer barometer signifies the monthly growth rate of the OECD's Consumer Confidence Index (CCI) and serves as a metric for comparing how much consumer sentiment has improved over a month across countries.
The government plans to further accelerate domestic demand activation through the recovery consumption coupons. The Ministry of Economy and Finance stated, "We will execute a supplementary budget of 31.8 trillion won as quickly as possible to recover the economy and people's livelihoods, and we will concentrate the government's capabilities to ensure that the recovery consumption coupons, scheduled to be distributed on July 21, serve as a catalyst for consumption and local economic activation." It also added, "We will make every effort to support the damages to our corporations and to respond to trade risks."
The Ministry of Economy and Finance maintained its stance that "the trade environment is deteriorating due to tariff impositions by major countries, and concerns about trade and growth slowdowns are arising as volatility in international financial markets persists."
Meanwhile, the key economic indicators announced last month revealed the sluggish trend of the Korean economy. According to May's industrial activity trends, production in all industries, as well as facility investment and construction investment, decreased. Specifically, production in mining and manufacturing fell by 2.9% compared to the previous month, and the service and construction sectors decreased by 0.1% and 3.9%, respectively. Facility investment decreased by 4.7% compared to the previous month, and construction investment also dropped by 3.9%.
In June, the number of employed people increased by 183,000, a smaller increase compared to the previous month (245,000). The unemployment rate was 2.8%, down 0.1 percentage points from the same month last year. The consumer price inflation rate rose to 2.2%, showing a slight increase.
However, June exports increased by 4.3% compared to the same month last year due to improvements in the semiconductor industry. The average daily export amount also increased by 6.8%.
In June, the financial market showed an increase in stock prices, rising government bond rates, and a decline in exchange rates. The dwellings market saw increases in both transaction prices and rental prices.