On November 4, as consumer sentiment in South Korea reached its most positive level in four years and three months, Myeongdong in central Seoul was packed with locals and foreign tourists. (Yonhap)
SEOUL, Nov. 14 (Korea Bizwire) – South Korea’s economy is showing signs of a slow but broadening recovery after a sluggish first half of the year, lifted by stronger domestic demand and a resurgent semiconductor industry, the finance ministry said Friday, while cautioning that major uncertainties still loom.
In its monthly economic assessment, known as the Green Book, the Ministry of Economy and Finance struck an optimistic note for the second month in a row—marking a notable shift after months of restrained language. The ministry first used the term “recovery” in the previous edition.
“Recently, our economy has been showing signs of recovery, driven by improving domestic consumption and strong semiconductor performance, moving away from the sluggishness seen in the first half,” the report said.
Still, the ministry warned that the rebound remains uneven. Weakness persists in sectors exposed to higher interest rates and global demand fluctuations, including manufacturing and construction, and job losses continue among younger workers. Employment grew by more than 190,000 in October, extending gains this year, but vulnerable groups remain under strain.
Industrial production in September rose from a month earlier, and facility investment jumped 12.7 percent, reversing August’s decline. Retail sales fell for a second month but at a much slower pace, suggesting that consumer sentiment may be stabilizing.
An employee working at a semiconductor fab (factory) (Image courtesy of SK hynix)
Exports—long a main engine of South Korea’s economy—rose 3.6 percent in October from a year earlier to $59.57 billion, marking a fifth straight month of growth, buoyed by revived global demand for semiconductors. But inflation accelerated to 2.4 percent, the fastest increase in more than a year, propelled by higher prices for travel, dining and other services.
The ministry also underscored growing risks to the global outlook, pointing to escalating tariff measures by major economies that could disrupt trade flows and inject volatility into financial markets.
Seoul and Washington in late October finalized the terms of South Korea’s $350 billion investment pledge—agreed to during summit meetings between President Lee Jae Myung and President Donald Trump—in return for reduced U.S. tariffs. Joint documents are expected to be released soon, pending final coordination.
Looking ahead, the ministry said it will expand policy support to reinforce domestic demand and sustain the recovery, while pushing ahead with structural initiatives, including an economic overhaul centered on artificial intelligence.
M. H. Lee (mhlee@koreabizwire.com)
