S. Korea's economic recovery yet to benefit households broadly

Seoul, Oct 12

The benefits of South Korea's economic recovery have yet to reach households more broadly, a state-run think tank said on Monday, noting the recovery in their purchasing power remains limited.

"The recovery in household purchasing power remains constrained due to subdued underlying wage growth and elevated supply-side inflationary pressures, including those from persistently high oil prices," the Korea Development Institute (KDI) said in its monthly economic assessment.

The KDI noted that despite the South Korean economy's recovery led by the artificial intelligence (AI) industry, its benefits have not yet reached households broadly, reports Yonhap news agency.

The think tank nevertheless said the South Korean economy appears to be maintaining its recovery momentum, with manufacturing output continuing to grow at a solid pace.

"Exports and equipment investment continue to grow strongly, led by AI-related sectors, as global demand for AI infrastructure investment remains robust," the KDI said.

In September, South Korea's exports soared 83.5 percent from a year earlier to a record US$120.9 billion, driven by a surge in chip shipments.

Semiconductor exports exceeded $60 billion for the first time ever last month, boosting overall export figures.

"Semiconductor and computer exports continue to grow rapidly, while exports of other products linked to AI infrastructure, including steel products and nonferrous metals, also remain solid," it added.

Meanwhile, South Korea's top central banker will attend a meeting of the Group of 20 (G20) finance ministers and central bank chiefs to be held in Thailand this week, the Bank of Korea (BOK) said on Monday.

BOK Gov. Shin Hyun-song will join the G20 Finance Ministers and Central Bank Governors Meeting, set to take place in Bangkok, where participants will discuss global economic conditions, growth and global imbalances, according to the central bank.

He will also attend the International Monetary Fund-World Bank Group (IMF-WBG) meetings, where discussions will focus on the global economic outlook and financial stability.