South Korean finance ministry in its monthly economic report, i.e. Green Book said that the economy is still uncertain about the recovery of domestic demand, as the latest resurgence in COVID-19 cases is negatively impacting the person-to-person service sector.
Despite the fourth wave of the pandemic, the ministry stated in its monthly economic assessment report that the country's exports have maintained a solid growth momentum and the job market has improved.
"However, uncertainty over domestic demand has persisted, focusing on person-to-person service segments," according to the Green Book from the Ministry of Economy and Finance.
The pandemic's fourth wave is anticipated to reduce rising private expenditure, perhaps stalling the recovery. The greater Seoul region, which is home to half of the country's 52 million inhabitants, has been subjected to the most strict social distancing measures for the last two months, including commercial limitations and a prohibition on private meetings of three or more individuals after 6 p.m.
For the 73rd day in a row, the number of daily virus cases surpassed 1,000, with the country adding 2,008 new COVID-19 cases on Friday, bringing the total to 281,938. South Korea provided the first dose of COVID vaccinations to 69% of the country's entire population, with 41.8% of the population completely inoculated.
The finance ministry previously stated that card spending has not decreased as a result of the current pandemic, in stark contrast to consumption patterns seen during previous outbreaks of the virus. Last month, credit card spending increased 7.9% year on year, marking the seventh consecutive month of growth. Department store sales increased by 14.4%. However, automobile sales in the country fell 7.1% on-year in August, marking the sixth consecutive month of a downturn, and sales at discount stores fell 2.5% last month.
Moreover, in August, there were 518,000 more jobs than a year ago, and the consumer price index (CPI) rose 2.6% in the price for agriculture commodities and oil products.
Earlier in August, the foreign ministry had said that the potential economic consequences of the current pandemic wave will be "inevitable." The government forecasted 4.2% growth for Asia's fourth-largest economy this year. The Bank of Korea expects the economy to grow by 4% this year.