Sagging private consumption rocked South Korean economy despite recover in exports, which account for about half of the export-driven economy, a government report showed on Thursday.
The finance ministry said in its monthly economic assessment report, called Green Book, that uncertainty at home and abroad, such as the Trump administration policy and slowing consumer spending, can lead to the continued weakness in domestic demand though exports recovery is positive.
South Korea’s exports jumped 11.2 percent in January from a year earlier, posting the double-digit growth in four years.
However, production in the mining and manufacturing industries declined 0.5 percent in December from the prior month. Retail sales, which reflect private expenditure, retreated 1.2 percent in the month.
Expectations for the Trump administration’s protectionist moves resulted in the South Korean currency’s ascent to the U.S. dollar. The stronger local currency tends to dampen price competitiveness of South Korean exporters and the subsequent lower overseas earnings.
South Korean consumers refrained from spending money on political unrest that was caused by the impeachment of President Park Geun-hye. It caused power vacuum and the absence of economic control tower.
Political uncertainty recently escalated as the president side tried fiercely to delay the ruling on the impeachment motion. The constitutional court is forecast to end its deliberation before the middle of March.
An early presidential election must be held within 60 days if the court permanently removes Park from office.
According to recent opinion polls, about 80 percent of South Koreans demanded the permanent removal of the scandal-scarred leader, while some 15 percent opposed it.
Candlelit rallies to demand Park’s end of presidency have been held every Saturday night since late October, but elderly conservative South Koreans also demanded the rejection of the impeachment. Enditem