The government, in a recent economic assessment, said the recovery trend of Korea's economy is solidifying. It said conditions have turned positive on the back of a surge in exports and improvements in domestic demand, including consumption. However, it noted that concerns over prices and employment persist.
The Ministry of Finance and Economy said on the 15th in its July edition of the "Recent Economic Trends (Green Book)," "Korea's economy has continued to post a sharp increase in exports following a significant expansion in first-quarter growth," adding, "With domestic demand, including consumption, which had slowed due to the Middle East war, showing signs of improvement, the recovery trend is solidifying."
Earlier, from March to May, the ministry had referred to "downside risks to the economy" stemming from the Middle East war, then toned it down last month to "uncertainty in the economy," assessing that "the recovery trend is continuing." It went further this month to judge that the recovery has become more pronounced.
Based on this assessment, the government raised Korea's real economic growth rate for this year by 1 percentage point (p) in its recent "second-half economic growth strategy," from 2% to 3%.
However, it noted, "The burden on livelihoods continues, including rising prices and slowing employment, due to the aftereffects of the Middle East war." Consumer prices last month rose 3.2% from a year earlier due to higher prices of agricultural, livestock and fisheries products and the continued impact of high oil prices. The increase widened by 1 percentage point from the previous month (3.1%).
In employment, after the number of employed fell in May for the first time in 17 months, it turned to an increase last month (up 63,000) in just one month, but that was only one-third of the year-earlier gain of 183,000. In particular, weakness in jobs for young people and in manufacturing continued. The government lowered its outlook for the increase in the number of employed this year from 160,000 to 150,000.
The ministry said, "To minimize the impact of the Middle East war, we will make every effort to stabilize livelihoods, including managing supply and demand of key items and prices," adding, "We will swiftly push ahead with the second-half economic growth strategy to respond to post–Middle East war strategies, a rebound in potential growth, and structural issues such as polarization."