Seoul: South Korea's economy continues to show solid signs of recovery, supported by robust exports and improving domestic consumption, the finance ministry said Friday. The Ministry of Finance and Economy offered the assessment in its monthly economic report, known as the Green Book, maintaining its positive assessment from the August report while noting that uncertainties surrounding the war in the Middle East persist.
According to Yonhap News Agency, the report highlighted that South Korea's exports surged 68.7 percent in August from a year earlier, buoyed by strong semiconductor shipments. However, the ministry acknowledged that uncertainties related to the war in the Middle East have increased, exerting pressure on people's livelihoods amid inflation caused by high oil prices and employment challenges faced by vulnerable groups and sectors.
In August, South Korea added 184,000 jobs from a year earlier, while the unemployment rate remained unchanged at 2 percent. This increase marked the largest gain since 206,000 jobs were added on-year in March. Nevertheless, the employment rate for people aged 15 to 29 dropped to 44.1 percent, down 1 percentage point from a year earlier, marking the 28th consecutive month of decline.
Consumer prices in South Korea rose 3.1 percent from a year earlier in August, accelerating from a 2.8 percent on-year rise in July. In response, the finance ministry vowed to shield the economy from the fallout of the Middle East war by implementing measures to stabilize prices of key items ahead of Chuseok, the Korean equivalent of Thanksgiving, which runs from Sept. 24-27.
The government also announced plans to implement economic growth initiatives for the second half of 2026 to address post-war challenges, revitalize growth potential, and tackle economic polarization. Despite the recent surge in global oil prices, an official from the finance ministry stated that the impact on the South Korean economy is expected to be limited due to the fuel price cap currently in place. "Even if crude prices hover above US$100 per barrel, there would be no initial shock to the economy due to the fuel price cap," the official said. "Unless there are other factors, consumer prices are expected to rise 2.7 percent this year."