APD | South Korean economy hit by weak exports, investment

By APD writer Alice

Weak exports and investment have made South Korea’s economy sluggish, the country’s Ministry of Economy and Finance said in its monthly economic assessment report.

In its report, called the “Green Book”, the ministry said the trend of stagnant exports and investment still lasts although industrial production is rising.

The country’s exports declined for the 10th consecutive month to $44.7 billion in September, a year-on-year fall of 11.7 percent, due to the global trade conflicts and lower prices of semiconductor products.

Moreover, in July, Japan tightened regulations over its exports to South Korea of three materials vital to produce memory chips and display panels, the main export stables of South Korea.

A 31.5 percent on-year decrease $8.5 billion in outbound shipments of chips in September hard hit the exports of South Korea as semiconductors account for one-fifth of its exports.

The country’s exports are only boosted when the semiconductor sector recovers and the US-China trade tensions ease, said Minister of Economy and Finance Hong Nam-ki.

In addition, facility investment in South Korea fell 2.7 percent in the first half of the year, hindering the local economy from growing.

Recently, Standard &Poors revised down its growth forecast for South Korea's economy this year to 1.8 percent from its previous 2 percent projected in July. S&P also said that the South Korean economy could grow 2.1 percent in 2020, also down from its previous forecast of 2.6 percent.

In July, South Korea slashed its economic growth outlook for this year to between 2.4 percent and 2.5 percent from its previous forecast of between 2.6 percent and 2.7 percent made in December 2018, citing weak exports and sluggish investment.

(ASIA PACIFIC DAILY)