Seoul, Jan. 8 (BNA): South Korea is showing signs of an economic slowdown, as its manufacturing sector loses momentum in the wake of slowing exports, a government think tank said Sunday.
The Korea Development Institute (KDI) said in its monthly report, “Investment maintained high growth (in November), but exports fell due to weak external demand, which means that economic activity is losing steam.”
South Korea’s finance ministry said last month that Asia’s No. 4 economy is expected to see a 4.5 percent drop in exports this year due to the global economic slowdown and weak chip prices.
“On the production side, despite the recovery in cars, the manufacturing industry showed a decline, led by an increase in losses in most items, and a decline in growth in the service industry,” she added.
Data from Statistics Korea earlier showed that industrial production rose 0.1 percent month on month in November, reversing from a 1.7 percent drop in October.
The auto sector’s output jumped 9 percent during the period. However, growth has been limited, with output from the chip industry falling 11 percent amid weak global demand.
“The downward pressures are expected to intensify as the impact from rising interest rates at home and abroad gradually spreads through the real economy,” added the German Development Institute (KDI).
The Bank of Korea has raised the benchmark interest rate by 2.75 percentage points since August 2021 to the current 3.25% to bring down inflation.
MI