SEOUL (Reuters) – South Korea’s finance ministry on Friday said the economy was recovering thanks to improvements in consumer confidence and some economic indicators, although it said the coronavirus may delay a further recovery.
“Fixed prices of DRAM chips and expectations of a global economic recovery were seen rising, but there is a possibility of global economic growth, including China, and the recovery trend in (South Korean) economy being constrained depending on the development of coronavirus outbreak,” the ministry said in its monthly assessment of the economy.
Recent economic indicators have shown signs of recovery in Asia’s fourth-largest economy.
The Bank of Korea’s composite consumer sentiment index in January rose to 104.2 from 100.5 a month earlier, marking the highest reading since June 2019.
The country’s annual inflation also accelerated in January to its fastest in 14 months, Statistics Korea data showed.
The ministry also said bullish sales in discount and online stores, and an increase in Chinese tourists would support January retail sales, although sluggish department store and auto sales weighed on overall data. The ministry did not say if it expected the coronavirus to affect Chinese tourism numbers after this period.
South Korea’s retail sales in December last year rose 4.6% from a year earlier, boosted by durable goods such as cars. The nation’s December factory output also surged on soaring chip production, marking the fastest jump in more than three years.
South Korea’s finance ministry sees economy recovering but coronavirus a risk
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