South Korea's Ministry of Economy and Finance published its latest economic assessment, finding that a resilient recovery continues as exports rise sharply, investment maintains solid growth and consumption gradually improves. However, August data showed weaker production, retail sales and equipment investment, while the Middle East war has increased uncertainty and oil driven inflation pressures. Employment conditions also remain difficult for vulnerable groups and sectors. Exports rose 83.5% year over year in September to USD 120.94 billion, led by semiconductors, computers, cosmetics and ships, while imports increased 26% and the trade surplus reached USD 49.85 billion. In August, total industrial production fell 1.3% from the previous month as mining and manufacturing output dropped 4.8%, outweighing gains in services and construction. Retail sales declined 1.8% and equipment investment fell 9.5%, although equipment investment remained 16.1% above its year earlier level. The coincident cyclical indicator rose 0.5 point, while the leading indicator declined 0.1 point. Consumer inflation eased to 2.9% in September from 3.1% in August, with inflation excluding food and energy at 2.8%, but petroleum prices continued to rise sharply. Employment increased by 113,000 from a year earlier, down from 184,000 in August, while unemployment fell 0.1 percentage point to 2%. The government plans to manage supplies of key items to limit the economic effects of the Middle East war and strengthen measures aimed at household stability and reducing economic polarization.

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