Amidst the slowing global business environment, and the uncertainty surrounding the trade wars between the United States and China and the scheduled departure of the United Kingdom form the European Union, growth in the South Korean economy remained sluggish because of weak export and investment, the finance ministry of the country said on Friday.
The ongoing trend of slowing exports and investment continued through the month even though there was growth in industrial production, said the Ministry of Economy and Finance of South Korea in its monthly economic assessment report which is called Green Book.
The ministry noted in the report that while there were the already existing export curbs by Japan, there was also impact of the external uncertainties on the economy of the country. Additionally, the economy was also impacted by the ongoing global trade disputes and the slowdown in global trade and economy. One of the major factors for the sluggishness of the South Korean economy was also the slump in demand and prices in the global chip industry and market – which in turn is related to a drop in the global demand for smartphones and cloud services – the main areas of use of chips manufactured by chip making giants of South Korea.
The slump in exports for South Korea for the month of September marked the tenth consecutive month of drop in its exports because of the overall slump in global trade and demand as well as the downturn in the global semiconductor industry.
The South Korean manufacturing and exports of computer chip was also impacted by the imposition of exports from Japan to South Korea in July for three materials that are absolutely critical for the manufacturing of memory chips and display panels which is a very important component of the exports of South Korea.
South Korea was delisted by Japan in August from its whitelist of trusted trading partners who are given preferential treatment and advantages. Responding to the measures, South Korea also undertook the same measure against Japan soon after.
There was a 0.5 per cent increase in eth growth rate for production in all industries in August compared to the month earlier. However the production in the mining and manufacturing industries reported a drop of 1.4 per cent month on month. There was a 1.2 per cent growth in the output of the services industry’ during the monthly period under consideration.
In September, there was a drop of 0.4 per cent in the growth of consumer price compared to the same month a year ago which was the first month of drop since the records and data had been started to be kept by the statistical office in 1965. The ministry accorded this drop to supply-side factors including lowering of prices for products and foods from farms and oil.
Core consumer price gained 0.6 percent last month.
(Adapted from XinhuaNet.com)