KDI Raises Concerns Over Economic Slowdown

The Korea Development Institute (KDI), a state-run think tank, has for the first time this year mentioned an "economic slowdown," marking a more serious tone than its previous warnings about "expanding downward pressure on the economy."

First Quarter GDP Hits Record Low

South Korea's real gross domestic product (GDP) growth rate for the first quarter of this year was -0.246% compared to the previous quarter, positioning it at the lowest among the 19 countries that have reported their first quarter growth rates so far.

Domestic Demand and Exports Under Strain

Domestic demand is being hampered by a weakened construction sector, while exports are slowing due to deteriorating trade conditions. Construction investment has shown a continuous decline, with this year's completion amount dropping by double digits compared to the same month of the previous year for three consecutive months.

Manufacturing Sector Shows Resilience

Despite the challenges, manufacturing production, led by semiconductors, remains on a favorable trajectory, with a significant increase in related investment. However, the prolonged downturn in construction is keeping overall production and domestic demand growth at low levels.

Exports to the U.S. Decline Sharply

Exports, which had been a pillar of the Korean economy last year, are also slowing, particularly to the United States, where daily average exports decreased by -10.6%. KDI attributes this slowdown to the impact of U.S. tariff increases and high uncertainty related to trade policies.