S. Korea's Jan. green book points to "greater downside risks" to economy

Korea's political instability appears to be casting a darker cloud of uncertainty over its economy amid the presence of quote "greater downside pressure".

Our correspondent Lee Soo-jin explains.

South Korea is seeing greater downside risks to its economy, as uncertainties grow both at home and abroad.

The somber assessment is from the latest economic green book,. a monthly economic assessment report, released by the Finance Ministry on Friday.

"The term "concerns about increased downside risks" was previously used, but has now been replaced with "greater downside pressure." This change reflects the negative trends observed across industries during both October and November."

It presents a bleaker outlook compared to last month's report when the government omitted the phrase "economic recovery" for the first time in over a year, as January's report also includes concerns about employment, an area where the government had previously been largely optimistic.

In December, South Korea saw its first year-on-year decrease in employment figures in more than three years, as a downturn in industrial activity has begun to spill over into the labor market.

This was mainly attributed to a larger drop in employment in the manufacturing sector last month, which continued to see a decline for the sixth straight month, and the construction sector for eight consecutive months.

This comes as industrial output in November dropped point-four percent compared to the previous month, as the services and construction sectors remained weak, marking a fall for the third straight month.

Services output declined by point-two percent, driven by decreases in the finance and insurance sectors.

The construction sector also experienced a drop in production for the seventh consecutive month as building activity slowed, setting a new record for the longest continuous downturn since 1997.

But retail sales, an indicator of consumer spending, rebounded by point-four percent compared to the previous month after seeing declines in both September and October.

The finance ministry official said the month's report also placed less emphasis on concerns about inflation, as figures for December showed that consumer prices rose 1-point-9 percent year-on-year, marking the fourth consecutive month of inflation under the two percent mark.

But with continued political unrest in the country as well as mounting concerns about potential changes in the trade environment during President-elect Donald Trump's second term,

the government pledged to collaborate with relevant agencies and swiftly implement economic policy plans for 2025 to ensure economic stability.

Lee Soo-jin, Arirang News.