Finance Ministry deletes expression‎ ‘sluggish’ from economic assessment

The Economy and Finance Ministry said in the November issue of its “Recent Economic Trend (Green Book)” published Friday that the Korean economy is maintaining growth pace in production and consumption but is continuously witnessing a decline in export and construction investment, which is limiting growth. The ministry has deleted the expression‎ “sluggish” from the Green Book although it made diagnosis similar to its assessment that “sluggish trend in export and investment continues” a month earlier. The expression‎ “sluggish” remained seven times in the Green Book for seven months from April to October this year, which is the longest time since its first publication in 2005. 　

“It does not mean that the economy has hit the bottom or there was a change in perception towards the economic situation,” said Hong Min-seok, chief of the ministry’s economic analysis department. “We have changed the expression‎ into a more accurate one because specific expressions about export and investment could be misinterpreted as sluggishness in the overall economy.” While the global economy is slowing broadly in tandem amid contraction of global trade and the manufacturing sector, there are constantly lingering uncertainties including Japan’s export restrictions, U.S.-China trade dispute, and the timing of recovery of the global semiconductor market.

According to the Green Book, production in the mining and manufacturing sector increased by 0.4 percent, while that in the service sector increased by 1.0 percent in September, showing constant growth. The Green Book assessed that jobs increased 419,000 in October, as the figure is on track to recovery.

Exports, however, declined by 14.7 percent in October year-on-year, the steepest drop in three years and nine months, due to a contraction in global trade and a sluggish semiconductor market. The slumping trade thus continued to last for 11 consecutive months. Construction investment declined by 7.4 percent in September year-on-year, while facilities investment also remained in the negative territory although the size of reduction narrowed (-1.6 percent).

Critics say that the government’s deletion of the expression‎ “sluggish” despite a lack of notable change in the perception towards the economy must have been affected by President Moon Jae-in’s order on Thursday. President Moon told Deputy Prime Minister for Economy Hong Nam-ki to continue to display leadership for the Korean economy. Such critical argument is backed further by the fact that “sluggish” in the semiconductor market” in the comprehensive assessment chapter of the Green Book was hurriedly corrected to “a drop of semiconductor unit prices” by using correction tape one by one. After all, the term “sluggish” does not appear in the latest edition of the Green Book at all, other than in the cases meant to describe international grain prices or economic situations in other countries including the U.S. “The change of expression‎ was decided days ago, and has nothing to do with the presidential office,” a ministry official claimed.


Ae-Jin Ju jaj@donga.com