The government said South Korea's economy is maintaining a steady recovery, keeping its upbeat assessment unchanged from the previous month.
In its October Green Book on recent economic trends, released on the 16th, the Ministry of Economy and Finance said the economy is "maintaining a steady recovery, with exports rising sharply, investment showing solid growth and consumption improving gradually." The wording was identical to September's assessment. The ministry had described the recovery as "becoming firmer" in July and "strengthening" in August, sustaining a positive view of the economy.
August industrial activity data showed declines in production, consumption and investment alike. All-industry output fell 1.3% from the previous month, weighed down by a 4.8% drop in mining and manufacturing production. Compared with a year earlier, all-industry output rose 1.9%, while mining and manufacturing production fell 2.2%.
Consumption and investment were also weak. Retail sales fell 1.8% from July as purchases declined for durable goods such as passenger cars and home appliances, and for non-durables including vehicle fuel. Equipment investment dropped 9.5%, led by transport equipment, on a base effect from a concentration of ship and aircraft purchases the previous month. A ministry official attributed the across-the-board declines to "a combination of temporary factors, including the base effect from the previous month and summer shutdowns at automakers." The official added: "Industrial activity is expected to rebound in September as strong exports continue, equipment investment growth widens and economic sentiment stays favorable, while the temporary downward factors seen in August unwind."
Exports extended sharp gains, underpinning the recovery. September exports rose 83.5% from a year earlier, driven by higher shipments of semiconductors, computers and cosmetics. The daily average export value reached $5.63 billion, up 104.9% from a year earlier.
Sentiment indicators among consumers and businesses largely held up. The Composite Consumer Sentiment Index stood at 106.6 in September, up 2.1 points from August. The Composite Business Sentiment Index for actual conditions fell 0.5 point to 99.1, while the outlook index for October was unchanged from the previous month at 99.6. The cyclical component of the coincident composite index rose 0.5 point in August, but the leading index component fell 0.1 point.
Job growth slowed and inflation eased. The number of employed people rose by 113,000 in September from a year earlier, down from an increase of 184,000 in August. Still, employment gains stayed above 100,000 for a third straight month. The unemployment rate was 2.0%, down 0.1 percentage point from a year earlier. Consumer prices rose 2.9% in September, slowing from August's 3.1%. The index excluding food and energy rose 2.8%, the index excluding agricultural products and petroleum 2.7%, and the living necessities index 2.5%.
In financial markets, stock prices rose and the won strengthened against the dollar in September, while treasury bond yields climbed. Home sale prices and jeonse (a lump-sum deposit lease) prices rose 0.32% and 0.35%, respectively, in August from the previous month.
On external conditions, the government said the global economy is sustaining moderate growth but that uncertainty persists from the war in the Middle East and U.S. tariff measures. With uncertainty from the Middle East conflict having widened somewhat, it said price pressure from high oil prices and difficult hiring conditions for vulnerable groups and sectors are weighing on households. A ministry official said the government "will ensure thorough management of supply and demand for key items to minimize the impact of the Middle East war, while further strengthening policy efforts to stabilize livelihoods and ease polarization so that the warmth of growth can spread across the economy."