S. Korea's economy remains in a slump: gov't report

By Koh Byung-joon
SEOUL, June 4 (Yonhap) -- South Korea's economy may be recovering as a global
downturn abates but it remains in a slump as domestic demand, exports and other
indicators are not showing signs of marked improvement, a government report
showed Thursday.

"While financial markets are stabilizing and industrial output continues its
on-month expansion, the overall economy still remains in a slump due to weak
domestic demand, exports and employment markets," the Finance Ministry said in
its monthly economy-assessment report.
"A global economic downturn is abating and the local economy is also on the road
to recovery but the pace of the rebound is weak and uncertainty in worldwide
financial markets and concerns over rising oil prices make it tough to paint an
optimistic outlook for the future," it added.
The government assessment comes amid growing optimism that the economy might be
bottoming out and indeed may have already hit its lowest point amid improving
indicators.
The report said that industrial output shrank 8.2 percent in April from a year
earlier, decelerating from a 10.5 percent on-year decline in March. From a month
earlier, output rose 2.6 percent, the fourth consecutive month of expansion.
Sales of consumer goods in the same month fell 4 percent from a year earlier
after declining 5.2 percent in March, it added.
Corporate investments, however, remained weak amid cloudy economic outlooks.
Facility investments plunged 25.3 percent in April from a 23.3 percent decline a
month earlier, according to the report.
Exports, the nation's main growth engine, also slumped. Overseas shipments
declined 28.3 percent in May after falling 19.6 percent the previous month.
The report forecast that slumping exports could lead to a contraction in
industrial output in May.
"We need to keep our expansionary macroeconomic policy stance, while making
efforts to create jobs and stabilize the lives of ordinary people by carrying out
additional fiscal spending," the ministry said.
"In addition, we are required to enhance the environment for corporate investment
and business conditions. Restructuring for the corporate sector should also be
pushed in a consistent way as part of efforts to raise competitiveness and
strengthen economic fundamentals," it added.
kokobj@yna.co.kr
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