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Investments in Korea see a significant improvement

Apr 29,2017
Exports have improved for the fifth consecutive month and on Friday, government data showed another sign of economic recovery - investments made in the country also increased.

According to Statistics Korea, facilities investments, or investments in equipment and machinery, rose 12.9 percent in March compared to the previous month, and the growth rate reached its highest level since October 2013, when it rose 14.9 percent.

“Exports that have improved recently had a positive impact on industrial output and investments made in the country,” said Joo Hwan-wook, a director at the Ministry of Strategy and Finance.

Statistics Korea said the investments in the semiconductors sector improved largely thanks to Samsung Electronics’ performance.

Furthermore, Korean exports last month rose 13.7 percent year-on-year to $48.9 billion. It was the fifth straight month of increases. The amount of exported goods in March was also the highest since December 2014, when it reached $49.5 billion.

Overall industrial output in March rose 1.2 percent compared to the previous month. This was the most growth since November, when it reached 1.4 percent. Industrial output in the country rose for the third consecutive month starting in November, but it dropped in February.

Domestic consumption, on the other hand, remained unchanged from the previous month. The statistics agency said this was due to the base effect from the previous month when Chinese bought large amount of goods ahead of its government’s decision to limit imports from Korea in retaliation to Korea’s decision to deploy a U.S. missile defense system. In fact, sales at large discount chains in February jumped 15.9 percent from a month ago, as many Chinese bought goods in advance.

Even though economy seems to be recovering, the statistics agency remained cautious.

“The economy is getting better but there still are various uncertainties, such as rising protectionism in the United States and the deployment of Thaad,” said Ahn Hyung-joon, a director at the statistics agency. “The government needs to monitor these factors closely, and we believe the labor market has not been getting better yet.”

Experts also did not agree with the idea that the economy has improved.

“It appears that some of the economic indicators have improved due to the performance of goods exports,” said Hong Joon-pyo, a researcher at Hyundai Research Institute.


BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]