Finance ministry signals economic recovery boosted by consumption

And on the economic front.

The Finance Ministry believes the economy is showing signs of a subtle but tangible improvement.

Park Jun-han covers the latest findings.

The Ministry of Economy and Finance removed the phrase "downside pressure" from the country's economic green book for August, on Thursday, for the first time this year.

In the green book, the ministry noted that the country's economy has faced delays in the recovery of construction investment, employment challenges concentrated in vulnerable sectors, and concerns over a slowdown in exports due to U.S. tariffs.

However, it highlighted some positive signs, including increased consumption driven by policies such as supplementary budgets, and the distribution of a nationwide livelihood recovery consumption coupon.

"Since the new government took office, expectations for supplementary budgets and the implementation of the livelihood recovery consumption coupon have boosted consumption. As a result, August's assessment shifts from saying 'consumption recovery is delayed' to noting 'positive signs, such as an upward trend in consumption'."

Exports in July grew 5-point-9 percent compared to the same period last year, led by semiconductors, while inflation moderately eased to 2-point-1 percent.

The shift to an optimistic sentiment on consumption by consumers aligned with improved domestic and global uncertainties.

The Composite Consumer Sentiment Index, considered optimistic when above 100, rose to 110-point-8 in July, marking four consecutive months of increases.

"Consumer sentiment has gradually improved as political uncertainty eased. Following tariff negotiations with the U.S., economic uncertainty has significantly declined, with the 15% rate matching or falling below that of major countries."

The government pledged that it will swiftly execute the new supplementary budget and concentrate the capabilities of all government agencies so that the consumption coupons can serve as an opportunity to revitalize domestic demand.

It also stated that officials will undertake all-out efforts to respond to trade risks, such as supporting companies affected by U.S. tariffs.

Park Jun-han, Arirang News.