"Consumption Rebounding and Semiconductors Selling Well"... Government Sees Economy on Recovery Track for 4 Straight Months

February Issue of "Recent Economic Trends" Released on 13th
Narrower Job Gains, Ongoing Strains in Construction and Other Sectors
"Active Macroeconomic Policies to Broaden Recovery Momentum"

The government has assessed for the fourth consecutive month that there is a "trend of economic recovery." It analyzed that this is because consumption has picked up and exports, led by semiconductors, have increased.

The Ministry of Finance and Economy said on the 13th in the February issue of "Recent Economic Trends (Green Book)" that "recently, our economy has continued to recover thanks to improvements in domestic demand such as consumption and export strength led by semiconductors."

The Ministry of Finance and Economy said on the 13th in the February issue of "Recent Economic Trends (Green Book)" that "recently, our economy has continued to recover thanks to improvements in domestic demand such as consumption and export strength led by semiconductors." Generated AI image

This means the government has maintained its "recovery trend" assessment this month, following November and December last year and January this year. In August last year, the government removed the expression "downward pressure on the economy" and has since been gradually upgrading its economic assessment.

The government explained, "Indicators that had surged sharply in the third quarter of last year underwent a temporary adjustment in October last year due to base effects and other factors, but the recovery trend resumed from November onward."

However, it believes that difficulties continue in employment and the construction industry. The government said, "Labor-market challenges persist, especially in vulnerable sectors," and added, "Uncertainties also remain regarding the pace of recovery in construction investment and the impact of U.S. tariff measures."

It also expressed a negative view of global economic conditions. The government stated, "Trade conditions are deteriorating due to tariff measures imposed by major countries, and ongoing geopolitical uncertainties are causing continued volatility in international financial markets and energy prices, raising concerns about a slowdown in trade and growth."

Real-sector indicators such as production, employment, and consumption have generally improved. Looking first at the Industrial Activity Trends for December last year, mining and manufacturing production rose 1.5% from the previous month and increased 1.8% from the same month a year earlier. Construction output grew 12.1% month-on-month but fell 4.2% year-on-year. Service output increased 1.1% from the previous month and 3.7% from a year earlier. As a result, total industrial production rose 1.5% month-on-month and 1.8% year-on-year.

From the expenditure side, retail sales increased 0.9% from the previous month and 1.2% from the same month a year earlier. Facility investment, however, fell sharply. It declined 3.6% from the previous month and decreased 10.3% compared with the same month last year.

The Consumer Sentiment Index (CSI) for January stood at 110.8, up 1.0 point from a month earlier. The Business Survey Index (CBSI) for actual performance was 94.0, down 0.2 point over the same period. However, the outlook index for February was 91.0, up 1.0 point from the previous month. The coincident composite index for December last year fell 0.2 point from the previous month, while the leading index rose 0.6 point.

In the labor market, the number of employed people continued to increase, but the scale of the increase shrank significantly. The number of employed in January rose by 108,000 compared with a year earlier. This was the smallest increase in 13 months since December 2024, when the number of employed had decreased. The unemployment rate was 4.1%, up 0.4 percentage point from the same month a year earlier, the highest level in four years since January 2022.

Consumer price inflation was moderated by a narrowing in the rate of increase in agricultural, livestock, and fishery product prices. Compared with a year earlier, prices rose 2.0 percentage points, with the pace of increase slowing from 2.3% in the previous month. Core inflation, excluding food and energy, rose 2.0 percentage points year-on-year.

The government said, "To broaden the momentum of economic recovery, we will implement active macroeconomic policies and continue efforts to stimulate each of the consumption, investment, and export sectors," adding, "We will also swiftly push ahead with the 2026 economic growth strategy aimed at a rebound in potential growth, balanced growth for the people and overcoming polarization, and strengthening the foundation for a great leap forward."

This content was produced with the assistance of AI translation services.