Better consumption signs in Korea; gov't to push for growth through innovation

And the country's domestic consumption is starting to recover steadily, despite some concerns about economic uncertainty.

Our Park Kun-woo has the details.

Steady signs of recovery in domestic consumption are becoming a reality in South Korea.

That's according to the first economic ministerial meeting under the new Lee Jae Myung administration on Thursday.

"After a long slump, consumption is starting to recover. Domestic demand is revitalizing thanks to efforts such as the livelihood recovery consumption coupons. Retail sales have turned upward for the first time in four months, and consumer sentiment is at its highest in over four years."

Koo also pledged to hold a series of large-scale consumption-boosting events each month until the end of the year, aiming to sustain the momentum.

And to help non-capital regions, struggling with challenges such as shrinking populations, the government plans to match them with entities, including central ministries, under a sisterhood program to promote tourism and local specialties.

On Thursday, the state-run Korea Development Institute also echoed the positive signs in consumption in its August economic trends report.

It showed that consumption is partially improving, backed by declining interest rates, despite ongoing sluggishness in production, particularly in the construction sector.

KDI also projected a more positive outlook thanks to consumption coupons distributed last month.

However, the think tank also raised concerns of trade uncertainties linked to U.S. tariffs.

While July's exports increased year-on-year, the state-run think tank attributed the rise to front-loaded shipments from markets including Taiwan and ASEAN ahead of new U.S. tariffs.

Also on Thursday, Finance Minister Koo said the government will focus on a strategic transition toward a "hyper-innovation" economy driven by rapidly evolving technologies.

He said key sectors, including AI, will receive concentrated support to produce visible results in a short time.

More specific strategies are set to be unveiled later this month.

Park Kun-woo, Arirang News.