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| Containers are being unloaded from ships at Busan Port, Sept. 1. Yonhap |
By Ko Dong-hwan
Korea's near-future economic outlook doesn't look good, a predicament caused largely by outside factors such as rising oil prices and China's domestic woes that are increasing global economic instability, according to a state-run think tank, Thursday.
The Korea Development Institute (KDI) noted in its monthly economic analysis that the national economy was experiencing a slight easing in export contraction but external uncertainties were also intensifying.
It said the country's manufacturing production was picking up speed, thanks to the semiconductor sector, while services hadn't been derailed much from its modest growth path.
The report said, however, that domestic and international economic uncertainties were escalating mostly because of heightened concerns over China's economic instability and increasing inflationary pressures due to rising international oil prices.
"The Chinese economy faces growing downside risks, such as financial instability in its real estate firms and sluggish real estate investment," the report said. "Furthermore, the increase in consumer prices, driven by rising international oil prices, could partially hinder the alleviation of economic downturns."
Rising oil prices resulted from geared-down petroleum production by global petro exporters like Russia and Saudi Arabia. Saudi Arabia's state-run petroleum producer Aramco is reportedly limiting production deliberately so as to maximize its earnings before interest, taxes, depreciation and amortization (EBITDA) this year.
Concerns about possible additional rate hikes by the U.S. Federal Reserve are adding to the uncertainty.
The state-run think-tank's latest assessment came after the country's consumer prices rose 3.4 percent year-on-year last month due to higher prices of agricultural and manufactured goods. It was the steepest hike since last April when the year-on-year increase was 3.7 percent.
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