The finance ministry said in its monthly economic report, the Green Book,… that despite a slight rebound in exports, Korea may not regain its recovery momentum,… as consumption is still posting negative growth.
The report says that the industrial output in November grew 3.4 percent on-month, from a 1.3 percent drop the previous month,… and construction investment surged 6-percent, with facility investment growing 5.9 percent.
But consumption remained on shaky ground.
Retail sales figures dove zero.two percent,… in a sharp turnaround from a 5.2 percent gain in October.
Consumer sentiment also dropped to a near eight-year low in November,… hit hard by a local political scandal that's discouraged spending.
The news for the financial markets is similarly grim.
With the U.S. Federal Reserve expected to boost its base rate three times this year,… Korea's central bank doesn't have much room to maneuver, as it can't easily raise its key rate because of growing household debt nor can it cut the rate further, which would only prompt more Koreans to take out loans.
At the same time, it's watching foreign capital being pulled out from the local market.
With the multiple uncertainties ahead,… the ministry says it will boost its expansionary fiscal policy to counter some of the external and internal factors and hopefully lift the momentum for growth.
The government had previously announced that it would inject 31% of this year's 334-billion U.S. dollar budget in the first there months of the year… to boost the economy.
Shin Se-min, Arirang News.