South Korea's economy continues to remain sluggish due to weak exports, but its financial market remains relatively stable despite global uncertainties, a state-run think tank said Sunday.
"Manufacturing-led economic stagnation lingers as exports contract due to the global slowdown," the Korea Development Institute (KDI) said in its monthly report.
The assessment came after the country's exports fell for the sixth consecutive month in March due to weak global demand for semiconductors, with the country suffering a trade deficit for 13 months in a row.
"Consequently, the manufacturing industry faces elevated inventory levels and reduced capacity utilization rates, with production experiencing a marked decline," it added.
The KDI, however, said the downturn in domestic demand has been "somewhat alleviated" on the back of the service sector, with the financial markets maintaining "relative stability."
"The collapse of Silicon Valley Bank and Credit Suisse drove expectations of slower monetary tightening in major economies, leading to a decrease in the three-year government bond yield and exchange rate, and a surge in the KOSPI," the KDI said.
South Korea's main index closed at 2,476.9 points on the last trading day of March, up 2.65 percent from end-February.
"With the resurgence of travel demand, service production -- particularly in face-to-face businesses -- has observed a more accelerated growth," the KDI said.
The country's service output rose 0.7 percent on-month in February, led by the accommodation and food industries, as people's growing outdoor activity rose amid favorable weather conditions and eased COVID-19 restrictions, separate data released by Statistics Korea showed earlier.
"The sluggishness in retail sales moderated, led by automobiles, and construction investment posted faster growth, led by the building construction sector."
Source: Yonhap News Agency