Korea: Economic activity rebounds in February but remains weak
Latest reading: Economic activity increased 0.6% month-on-month in seasonally adjusted terms in February (January: -3.0% mom). The reading reflected a broad-based upturn, with activity in the services, industrial and construction sub-sectors all improving in February.
That said, February’s rebound only partially made up for January’s large fall. Moreover, on an annual basis, economic activity fell at a quicker rate of 2.5% in February (January: -2.0% yoy), the worst result since May 2020. Meanwhile, annual average economic activity growth fell to 0.4% in February (January: +0.9%), pointing to a worsening trend.
Panelist insight: ING’s Min Joo Kang said:
“Recent soft and hard data point to weaker-than-expected activity. In addition, the recent wildfires in the southern part of the country weighed on sentiment and activity in the first quarter. As a result, we have lowered our first quarter 2025 GDP forecast from 0.2% quarter on quarter, seasonally adjusted, to 0.1%.”