Chinese media Global Times reported on the 1st that South Korea's three major economic indicators - production, consumption, and investment - all decreased month-on-month in April, resulting in a 'triple decrease,' reversing from a 'triple increase' in March.

According to the article, the triple decrease was the first in 8 months, and it is believed to have been influenced by factors such as instability in the Middle East and sluggish domestic demand.

According to a summary by South Korea's National Data Office, the All-Industry Production Index for April (with 2020 as 100, excluding agriculture, forestry, and fisheries) was 117.8, a 0.6% decrease month-on-month. By industry, oil refining production decreased by 19.4% due to factors such as crude oil supply instability, recording the largest decline since May 1988. Automobile production also decreased by 10.0%, marking the largest decline since September last year.

Indicators for domestic demand and investment also slumped. The Retail Sales Index, which indicates consumer spending on goods, decreased by 3.6%, recording the largest decline since February 2024. Specifically, factors such as rising crude oil prices due to escalating tensions in the Middle East and the implementation of vehicle use restrictions by the government influenced the 8.3% decrease in automotive fuel consumption. Facility investment decreased by 3.6%, and the actual construction performance of construction companies also decreased by 1.4%.

In contrast, the semiconductor industry maintained its growth momentum, with semiconductor production increasing by 3.1% in April. The Bank of Korea (central bank) stated that expanding semiconductor demand and growth in information technology exports continue to support the economy, and raised its full-year economic growth rate forecast from 2% to 2.6%.

According to an analysis by ING Bank, the South Korean economy is caught in a tug-of-war between two opposing forces: growth driven by the global artificial intelligence (AI) boom boosting demand, and disruptions in energy supply impacting the domestic economy, and the April indicators are a manifestation of the latter. (Translation and editing / Yanagawa)