South Korea’s economy is showing weak production gains, driven mainly by a sharp contraction in construction investment, even as consumer sentiment has started to recover, the Korea Development Institute (KDI) reported Thursday in its monthly economic assessment. “Recently, the Korean economy has been experiencing sluggish production growth primarily due to weakness in the construction sector, but consumption conditions are showing signs of partial recovery,” the report noted. Government data confirmed the downturn: in June, overall industrial output remained weak, with construction output falling 12.3 percent year-on-year after a steeper 19.8 percent drop in May. The KDI emphasized that construction remains the key drag on production trends. By contrast, household spending has benefited from lower interest rates and stimulus measures. “Consumption conditions appear to be improving, with the consumer sentiment index remaining at a relatively high level,” the institute said. The report also pointed to ongoing challenges for exports. Despite easing trade frictions following a tariff agreement between the United States and its partners—including a deal that reduced planned U.S. tariffs on Korean imports from 25 percent to 15 percent in exchange for $350 billion of Korean investment in America—tariffs remain relatively high. According to KDI, “prolonged high tariffs continue to exert downward pressure on the economy,” signaling that external demand will remain under strain in the coming months. (ICE SEOUL)

Fonte notizia: KOREA JOONGANG DAILY