Seoul, Feb 9 The South Korean economy is showing a moderate increase in production, thanks to improved consumption, a state-run think tank said on Monday.
"Recently, our economy has maintained moderate production growth, led by the service sector, thanks to improvements in consumption," the Korea Development Institute (KDI) said in its monthly economic assessment, reports Yonhap news agency.
In December, industrial output rose 1.5 percent from the previous month, while retail sales increased 0.9 percent, rebounding from a decline in November.
Notably, service sector production grew 3.7 percent on gains in most areas, reflecting broad-based recovery, according to the report.
The KDI said consumption is gradually recovering from a slump, supported by rising incomes and cumulative interest rate cuts, while consumer sentiment remains strong.
In contrast, facility investment fell 3.6 percent, largely due to a 16.1 percent decline in transport equipment, including ships and aircraft.
Construction investment also continued to weaken, with output in the sector dropping sharply.
The KDI noted that investment remained sluggish, but exports, led by semiconductors, showed modest growth.
Export volumes have eased somewhat, but soaring semiconductor prices have kept the overall export value rising sharply, the report said.
The KDI also highlighted that external uncertainties, including potential U.S. tariff increases and oil price volatility, have expanded risks for the South Korean economy.
Last month, U.S. President Donald Trump threatened to raise "reciprocal" tariffs and auto, lumber and pharmaceutical duties on South Korea to 25 percent from 15 percent, citing a delay in the parliamentary process to pass a special investment bill facilitating the implementation of a trade deal reached by the two countries.
Meanwhile, South Korea's consumer prices rose at the slowest pace in five months in January, partly helped by the steady prices of petroleum products, government data showed.
Consumer prices, a key gauge of inflation, increased 2 percent from a year earlier last month, according to the data from the Ministry of Data and Statistics.
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