July 6, 2009

Officials: S. Korean economy improving

South Korea's economy, spurred by domestic demand and exports, is fast coming out of its decline, a state-run think tank said Monday.

Although the employment situation remains bleak, the Korean economy appears to be moving away from the declining phase as rapid contractions in domestic demand and exports are recovering relatively fast, the Korea Development Institute said in its monthly assessment, Yonhap news agency reported.

In a more cautious assessment last week, the finance ministry described the economy as still sluggish, needing continuation of the fiscal expansion for recovery.

KDI's assessment, based on recently improving indicators, said industrial production showed gradual improvements with seasonally adjusted, month-to-month output expanding 1.6 percent in May, the fifth straight month of growth. Public consumption also was rising, with consumer goods sales index rising 1.7 percent, the first growth since last August.

June exports fell 11.3 percent from the same month of last year, but the decline was much less than the 28.5 percent for May.

The jobless rate in May, however, rose 0.2 percent to 3.9 percent, the report said.