15:47 | 07/09/2016 Global Economy
Republic of Korea's economic recovery remains weak on the back of still lackluster private consumption and exports, a state-run think tank said Tuesday.
Signs of RoK's overall economic recovery have yet to be detected - Photo: dupress.com
The Korea Development Institute (KDI) said in a monthly report that signs of overall economic recovery have yet to be detected amid slumping retail sales as well as faltering exports and facility investment.
Retail sales gained 4.3 percent in July after expanding 9.0 percent in the prior month as temporary cut in consumption tax for cars ended at the end of June.
Exports, which account for about half of the economy, grew 2.6 percent in August from a year ago, marking the first rebound in 20 months, but daily average exports declined 5.3 percent last month, bolstering concerns about the main growth engine of the export-driven economy.
The government had unveiled a supplementary budget plan worth 11 trillion won (10 billion U.S. dollars), but it was passed last Friday through the National Assembly more than a month after the proposal. It remains uncertain whether the fiscal stimulus could have a fully positive effect on the economy.
Bank of Korea is expected to refrain from cutting its policy rate further as the U.S. Federal Reserve is widely forecast to raise interest rate at least once within this year.
The bank lowered its benchmark interest rate by 25 basis points in June to an all-time low of 1.25 percent./.