Domestic demand not recovering amid booming exports...Concerns over ”poor growth” = South Korea

In the Korean economy, exports are strong due to the recovery in semiconductor prices. However, domestic demand continues to be sluggish due to the decline in consumer purchasing power due to high interest rates and high prices. The economic situation that the people feel is the economic
Despite improvements in indicators, the situation remains dire, raising concerns about "poor growth." According to the export and import price index statistics released by the Bank of Korea, the export price index (won standard) for February
was 120.11, 1.4% higher than the previous month (118.51), rising for the second consecutive month. In particular, the rise in semiconductor prices has had an impact, and exports of computer, electronic, and optical equipment in February
The price index increased by 1.5% from the previous month. This is because the export prices of DRAM (1.8%) and flash memory (6.9%) rose.
Looking at the comparison with the same month last year, we can more clearly see the recovery trend in prices. Computer/Electronics in February
Export prices of optical equipment and equipment increased by 11.2% compared to the same month last year. DRAM soared 10.9% and flash memory soared 66.2%.
At a press conference on the 16th, Yoo Sung-wook, head of the bank's price statistics team, said, ``Semiconductor prices have increased by 2.2% compared to the previous month.
%, an increase of 18.4% compared to the same month last year." Semiconductor export prices continued to rise for seven consecutive months. This is the first time since it rose for nine consecutive months from January to September 2021. Compared to the same month last year
It showed an upward trend for two consecutive months. The export economy is booming due to the recovery in semiconductor prices. Exports last month totaled $52.41 billion, an increase of 4.8% from the same month last year. Semiconductor (67%
) increased in 6 out of 15 major export items. Production in the manufacturing industry decreased by 1.4% from the previous month, but increased by 13.7% from the same month last year. Compared to the same month last year, semiconductors (44.1%)
There was a large increase in motor vehicles (13.2%). The problem is domestic demand. In January retail sales, durable goods (down 1.0%) and semi-durable goods (down 1.4%) decreased, but non-durable goods (down 2.3%) increased.
This increased by 0.8% from the previous month. This is a 3.4% decrease compared to the same month last year. Even if exports recover, if domestic demand is not supported, the economic outlook will only worsen. Possibility of “poor growth” becoming a reality
There is sex. The Korea Development Institute (KDI) pointed out in its ``Economic Trends March'' issue, ``Recently, domestic demand in the Korean economy has continued to slow down, but exports are showing signs of recovery and the economic slump is easing.''
ing. Despite the upward trend in some domestic demand indicators, KDI judged that "consumption and capital investment continue to be sluggish due to high interest rates."
The retail sales value index (seasonally adjusted), which measures product consumption, increased by 0.6% and 0.6% in December last year and January this year, respectively.
It rose by 8%. However, compared to the same month last year, it has been on a downward trend for seven consecutive months. KDI said, ``The Lunar New Year, which was held in January last year, has been moved to February this year, and there is a positive impact on product consumption in January due to an increase in the number of operating days.
``At the same time, it also acted as a negative factor, leading to a decrease in consumption due to the holiday.'' On a seasonally adjusted month-on-month basis excluding the Lunar New Year factor, passenger cars (down 16.2%) and other
The decline was centered on items that are sensitive to profit margins. KDI also stated, ``The shrinking spending capacity due to the trend of high interest rates and the expansion of price increases for some items due to the deterioration of the supply environment are negative factors for consumption.
"There is a possibility that he was working," he said, expressing concern. We judge that service consumption is also on a slight upward trend, mainly in face-to-face industries. Service industry production in January increased by 4.4% compared to the same month last year, but KDI
It was analyzed that the increase was due to the number of days of operation. It added that the accommodation and restaurant industry (down 0.2%) has been stagnant, declining for the fourth consecutive month on a seasonally adjusted month-on-month basis.