Korea: Economic activity falls in April
Latest reading: Economic activity fell 0.6% in seasonally adjusted month-on-month terms in April, following a 0.4% rise in the previous month.
Relative to the prior month’s data, readings in April softened for services (-1.0% in seasonally adjusted month-on-month terms vs +1.5% in March) and industry (-0.7% vs +0.6% in March). In contrast, the reading for construction improved in April (-1.4% vs -6.1% in March).
In annual terms, economic activity was up 2.3% in April, following 2.8% growth in the previous month.
Panelist insight: ING’s Min Joo Kang said:
“Today’s data show the domestic economy being hit harder by the energy shocks. Semiconductors are doing heavy lifting, but overall activity declined. […] We believe that the government’s cash payouts should provide some buffer against a decline in consumption. For business sentiment, semiconductor performance remains strong. Also, we’re hearing from industry and government that energy supply has gradually improved since May. It’s still remarkably low compared to the pre-war level. But export bans on key petrochemical materials and increased imports from non-Middle Eastern countries are at least helping to mitigate the shock.”