govt-economic assessment

Economic slowdown lingers on sluggish exports, facility investment: gov't report

By Kang Yoon-seung

SEJONG, April 14 (Yonhap) -- South Korea's finance ministry said Friday the country continues to face an economic slowdown despite a recovery in consumption due to weak exports and facility investment.

"Recently, the South Korean economy's inflation has slowed, with domestic demand gradually recovering on the back of face-to-face activities," the Ministry of Economy and Finance said.

South Korea's on-year growth in consumer prices fell to the lowest level in a year in March by rising 4.2 percent on-year, in the latest signal that inflation could slow throughout this year.

"But the economic slowdown trend continued led by the manufacturing sector, due to the sluggish exports and facility investment," it added

It marked the third consecutive month for the ministry to mention an economic slowdown in its monthly assessment report, the Green Book.

Earlier this week, the central bank held its key interest rate steady at 3.5 percent for the second straight time as inflation appears to be easing and concerns are rising over an economic slowdown.

South Korea's exports, meanwhile, fell for the sixth consecutive month in March due to weak global demand for semiconductors, with the country suffering a trade deficit for 13 months in a row.

The ministry, however, said the South Korean financial market remained stable on eased concerns over the U.S. banking crisis.

The ministry added uncertainties for Asia's No. 4 economy are expected to continue, although there are also hopes over the reopening of China, the top trading partner for South Korea.

The country needs to keep a watchful eye on the financial instability sparked by monetary tightening moves, along with the prolonged war between Russia and Ukraine, it added.

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