South Korea's Economy on Recovery Path Amid Middle East Crisis Concerns

By Kang Yoon-seung SEOUL, May 15 (Yonhap) -- The South Korean economy continues to be on a recovery path on the back of strong chip exports, but the prolonged Middle East crisis is raising concerns over inflation and growing financial burdens on households, the finance ministry said Friday. The Ministry of Finance and Economy made the assessment in its monthly economic report, known as the Green Book, noting Asia's fourth-largest economy faces "downward pressure" in the aftermath of the geopolitical crisis. "In the first quarter, the South Korean economy expanded and continues to be on a recovery trend, but downward pressure caused by the Middle East war persists," the report said. "Exports remained strong on the back of semiconductors, and domestic consumption maintained its recovery. But due to the Middle East war, consumer sentiment has weakened, with rising global oil prices leading to inflation and increasing financial burdens on the people," it added. The finance ministry said the government will maintain an emergency response system to minimize the fallout and promptly implement supportive measures, including cash handouts through a supplementary budget. South Korea's consumer prices rose 2.6 percent in April from a year earlier, due mainly to higher oil product prices. It marked the largest on-year increase since July 2024, when inflation advanced 2.6 percent. The consumer sentiment index fell 7.8 points from the previous month to 99.2 points in April. Exports, meanwhile, exceeded US$80 billion for the second consecutive month in April, jumping nearly 50 percent from a year earlier, driven by robust semiconductor shipments.