The Korea Development Institute (KDI) diagnosed on the 7th that “the Korean economy has recently experienced a worsening of domestic demand due to the third epidemic of Corona 19 in Korea, but the economic slump is partially easing as product exports increase.”
KDI said, “The re-proliferation of Corona 19 has drastically reduced consumption and employment, and the economic slump is continuing, centered on domestic demand.” “The facility investment continues to increase, mainly in semiconductors,” KDI said. It is believed that the manufacturing industry is showing good growth and is partially easing the economic downturn.”
In terms of consumption, credit card sales in January estimated based on Shinhan Card sales fell 14.4% from a year ago. The decline was smaller than in December last year (-16.2%), but compared to November (-4.2%), it is still sluggish.
KDI said, “As external activities contracted due to strengthened quarantine such as corona 19 infection concerns and social distancing, the decline in semi-durable goods consumption and face-to-face service production increased, and the number of employed, mainly in the service industry, declined. As the two measures continue, the sluggish consumption will continue for the time being.”
Retail Sales Index and Consumer Sentiment Index[자료=KDI]
The employment situation of the service industry and temporary and daily workers hit by the coronavirus was also worsened.
In December of last year, the number of employed decreased by 628,000, a sharp increase from the previous month (-273,000). Among them, the number of employed fell sharply from -287,000 to -622,000 in the service industry, and from -206,000 to -521,000 in temporary and daily workers.
KDI, however, diagnosed that the manufacturing industry is continuing a solid growth trend as exports and facility investment have maintained a high growth trend due to improved demand for foreign products.
The export growth rate in January was 11.4%, a high level following the previous month (12.6%). In particular, semiconductors (21.7%), wireless communication devices (58.0%), and automobiles (40.2%) showed high growth rates. In December of last year, equipment investment also increased by 5.3%, with machinery (13.7%) showing a good trend.
KDI said, “The export of goods, mainly for information and communication technology (ICT) and automobiles, has shown an improvement trend, and while export prices have risen, inventory has continued to decline since September last year.”
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