South Korea’s economy begins to recover from export slump (Image courtesy of Yonhap)
SEOUL, Nov. 7 (Korea Bizwire) – South Korea has experienced the easing of an economic slowdown on the back of the recovery in the semiconductor industry amid persistent external uncertainties, a state-run think tank said Tuesday.
“The economic slowdown begins to ease, led by the semiconductor industry, while external uncertainties persist, as indicated by high interest rates and Middle East instability,” the Korea Development Institute (KDI) said in a monthly economic assessment report.
“Services production is maintaining a steady increase, and the slowdown in manufacturing production and exports is beginning to ease, driven by the semiconductor industry,” the report showed.
In September, the country’s industry output advanced 1.1 percent on-month and marked 2.8 percent growth from a year earlier.
The growth came as the production from the chip industry jumped 12.9 percent from the previous month. In an on-year time frame, the figure came to 23.7 percent, the sharpest on-year rise since June 2022, according to government data.
Driven by the performance of the chip industry, the country’s overall output of the manufacturing sector went up 1.9 percent on-month.
The service sector also reported a 0.4 percent on-month rise in output on the back of the upbeat accommodation and hospitality sector.
Last month, exports rose for the first time in 13 months by rising 5.1 percent on-year to US$55 billion on the improvement of the chip sector.
But the think tank pointed to rising interest rates in the U.S. to curb inflation and escalating tensions in the Middle East due to the Israel-Hamas war as major economic headwinds.
“The rise in the U.S. market interest rates is likely to influence domestic market rates, potentially hampering domestic demand,” the report read. “Intensifying geopolitical tensions are driving up the volatility of global oil prices.”
(Yonhap)
