Despite improved employment and exports, uncertainties remain due to pandemic: Finance Ministry
Updated: 2021-10-15 17:12:29 KST
South Korea's major economic indicators are showing signs of a slowdown as the fourth wave of the virus continues to take a heavy toll on the country.
According to the Finance Ministry's monthly economic report on Friday, the nation's industrial output in August was down point-2 percent on-month.
Retail sales and facility investment also dipped from a month earlier, marking the first time in three months that all three figures have dropped at once.
But exports in September extended their gains for an 11th straight month and more jobs were posted last month with the country recording its biggest monthly employment gain in more than seven years.
Despite this, the Finance Ministry said economic prospects remain uncertain.
"The local economy has recently seen a sharp rise in employment along with strong export growth, but uncertainties remain, such as in the in-person service industry."
The ministry also stressed that the uncertainties are not only due to domestic factorsbut also due to external risks.
In its report, it raised concerns over inflationary pressure due to surging raw material prices, adding that this could hamper the global economic recoveryand thereby affect the local economy.
A similar assessment was made by the Korea Development Institute last Thursday.
The state-run think tank warned that the country could feel the pinch from growing global uncertainty, hinting that downside risks are running high.
"So, on the one hand, there's shortages of supplies from supply chain bottleneck and on the other side, there's higher inflation. So, I think that's going to slowdown global economy very significantly."
The Finance Ministry also said that it cannot rule out the possibility of an inflation rate of three percent this monthgiven the current high exchange rates, rising oil prices, as well as last year's low base effect.
So far, consumer prices in South Korea have seen on-year rises of more than two percent for six straight months.
Min Suk-hyen, Arirang News.