The government diagnosed that our economy is showing solid growth thanks to strong exports and improvements in major economic indicators.
It is interpreted that the evaluation was raised one level to reflect the growth rate and increase in export performance in the third quarter.
In the November issue of 'Recent Economic Trends (Green Book)' published on the 13th, the Ministry of Finance and Economy stated, "Recently, our economy continues to show solid growth, with exports increasing significantly and investment growth expanding, while consumption is improving moderately."
Except for this year's April issue, when the impact of the Middle East war was temporarily significant, the government's perception of the economy has become more positive, with the expression 'economic recovery trend', which had been used since last November's issue, changed to 'steady growth'.
The real gross domestic product (GDP) growth rate (compared to the previous quarter, preliminary figure) for the third quarter announced by the Bank of Korea was 1.0%, more than three times higher than the original forecast (0.3%), and the fact that the growth trend has become more evident seems to have had an impact.
Lim Hong-ki, head of the economic analysis department, explained, "The expression used when the economy is slowing, bottoming out, and then rising is 'economic recovery'." He added, "When combining the third quarter GDP growth rate, this year's annual growth rate (forecast), and recent information on major institutions' forecasts for next year's growth trend, we adjusted our economic judgment slightly upward."
Exports, which are the basis for growth, continue to march high.
Exports in October (customs clearance standard/provisional) increased by 93.7% compared to the same month last year, and the average daily export amount increased by 76.1%. By item, semiconductors (259%) and computers (497%) increased significantly, while cosmetics (58%) and automobiles (18%) also increased.
Investment growth is also rapid.
Facility investment (preliminary GDP value) in the third quarter increased by 4.1% compared to the previous quarter. The facility investment index in September also increased by 5.3% compared to the previous month, with both machinery (4.7%) and transportation equipment (7.4%) increasing.
Consumption is still improving slowly.
Private consumption (provisional GDP) in the third quarter decreased by 0.2% compared to the previous quarter. However, retail sales in September increased by 3.6% compared to the previous month as sales of durable goods, semi-durable goods, and non-durable goods all increased.
The rate of increase in the domestic card approval amount in October was 5.9%, an increase from September (2.3%), and the fact that domestic sales of domestic passenger cars also turned from a decline in September (-19.0%) to an increase in October (2.0%) is considered a positive factor for future consumption recovery.
However, the fact that the consumer sentiment index fell from 106.6 in September to 105.4 in October is a negative factor.
Prices and employment conditions remain difficult.
The Ministry of Finance and Economy said, "As uncertainty continues due to the war in the Middle East, there are concerns about the burden on people's livelihoods, such as rising inflation pressure due to high oil prices and difficult employment conditions for vulnerable groups and sectors."
Consumer prices in October rose 2.8% compared to the same month last year. Although the rate of increase was slightly reduced compared to the previous month (2.9%), the high inflation rate of around 3% has continued for half a year.
The number of employed people in October increased by 139,000 compared to the same month last year, maintaining an increase of 100,000 for four consecutive months. However, the number of employed people in the manufacturing industry, which had increased in September, decreased again, and the number of employed young people (ages 15 to 29) recorded a 'minus' figure for the fourth year in a row.
Regarding the global economy, he diagnosed, "Although it continues to grow at a steady pace, uncertainty continues, including the development of the Middle East war and the direction of policies related to the artificial intelligence (AI) industry."
While the possibility of AI-related regulations is being discussed after the recent U.S. midterm elections, the impact of the AI industry following Nvidia's 'Jensen Huang scandal' appears to have been taken into consideration as a factor of external uncertainty.
However, Manager Lim said, “For now, it is only a matter of concern among financial market participants and is not having an impact on the real sector,” adding, “There has been no movement to reduce US data center investment performance or investment plans yet.”
The government said, "We will accelerate efforts to expand the growth base through the three mega projects, seven major SEEDs, Korean-style green transition (K-GX), and fostering the service industry, while strengthening policy efforts to stabilize people's livelihoods and alleviate polarization so that the warmth of growth can spread throughout the economy."
