SEJONG-- South Korea's economic recovery pace remains weak and feeble due mainly to the prolonged slump in private consumption, a state-run think tank said Wednesday.
"Signs of a slowdown have stabilized on the production side, but the overall economy is not showing hints of a steady recovery," the Korea Development Institute (KDI) said in its monthly evaluation of the country's economic conditions. "The improvement trend in domestic demand appears to be unsteady."
Concerns have been rising as industrial production backtracked in June, overshadowing booming exports and investment.
But in July, industrial output edged up 0.1 percent from a year earlier, turning around from the previous month's 0.5 percent fall on an increase in petrochemicals and electronic parts.
The manufacturing capacity utilization rate also rebounded to 73.4 percent in July, up from 71.2 percent.
Exports and investment have been the bright sides of Asia's fourth-largest economy, which saw its outbound shipments rise for 10 straight months through August, triggered by an upturn in global trade.
Facility investment is also boosted by the stellar overseas sales of chips, as the equipment investment index soared 25 percent on-year in July on the back of a 32.4 percent jump in machinery-related investment.
However, the KDI report said private consumption has remained in the doldrums for months despite a rise in July figures. It said consumer sentiment actually lost some ground in July.
"The consumer sentiment index retreated slightly, indicating that the private consumption aspect of the economy remains weak," it said.
Source: Yonhap News Agency