■KDI Economic Trend February
“Corona 3rd pandemic consumption and employment decline
The semiconductor and manufacturing industries are on a favorable increase”
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The Korea Development Institute (KDI), a state-run research institute, diagnosed that domestic demand was intensifying due to the third epidemic of a novel coronavirus infection (Corona 19), and that the economic slump was partially easing due to increased exports of goods. KDI, which has been evaluating the situation as a’slow economy’ since October of last year, carefully brought out the word’relaxation’ this month.
On the 7th, KDI announced in the February issue of “Economic Trends” that “consumption and employment have drastically declined due to the re-proliferation of Corona 19, and the economic slump is continuing, centered on domestic demand. However, he explained, “The manufacturing industry continued to grow well as exports and facility investment maintained a high growth trend due to improved demand for foreign goods.” In the case of domestic demand, consumption contraction and employment shocks are continuing following the Corona 19 shock following last month, but thanks to the improvement in exports, it plays a role in partially buffering the economic downturn.
KDI pointed out that the decline in consumption of semi-durable goods and production in the face-to-face service industry expanded as external activities contracted due to concerns about the corona19 infection and strengthening quarantine measures. Consumption of semi-durable goods (-11.1%→-17.2%) drastically decreased, mainly for clothing (-13.1%→-23.5%), while refraining from external activities. Credit card sales in January fell 14.4% from a year ago.
In terms of employment, due to sluggish demand and restrictions on economic activity, the number of employed people, mainly in the service industry, decreased sharply, and the inactive population also increased significantly.
On the other hand, product exports showed an improvement trend centered on information and communication technology (ICT) and automobiles, and while export prices rose, inventory continued to decline after September. KDI said, “We believe that the manufacturing industry is showing good growth, such as the continued increase in facility investment, mainly in semiconductors, which will partially ease the economic downturn.” Equipment investment in December of last year recorded an increase of 5.3%, with machinery (13.7%) showing a good trend.
Meanwhile, in the expert economic outlook survey conducted by KDI, most respondents predicted that the benchmark interest rate will remain at the current level until 2021 and will increase once in 2022.
/ Sejong = Reporter Hwang Jeong-won [email protected]
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