(LEAD) S. Korea's economic recovery remains solid, led by exports: finance ministry

South Korea's economy continues to demonstrate solid signs of recovery, with robust exports and improving domestic consumption driving growth, according to the country's finance ministry. The Ministry of Finance and Economy presented this assessment in its monthly economic report, known as the Green Book, maintaining its positive outlook from the previous month.

The finance ministry highlighted that while uncertainties stemming from the war in the Middle East persist, the impact on the South Korean economy is expected to be limited due to existing fuel price caps.

In August, South Korea's exports experienced a significant surge of 68.7 percent compared to the same period last year, driven by strong shipments of semiconductors. Despite this export growth, the ministry noted that the war's uncertainties have put pressure on people's livelihoods, exacerbated by high oil prices causing inflation and employment difficulties.

The unemployment rate remained steady at 2 percent in August, marking the largest job gain since last March, with the economy adding 184,000 jobs on a year-over-year basis. However, the employment rate for individuals aged 15 to 29 declined to 44.1 percent, marking the 28th consecutive month of a downward trend.

While consumer prices increased by 3.1 percent from the previous year in August, this acceleration from the 2.8 percent rise observed in July suggests a notable rise in the cost of living. The finance ministry pledged to mitigate the adverse effects of the Middle East conflict on the economy, including through price stabilization measures for essential goods, particularly ahead of the Chuseok holiday from September 24 to 27.

The government plans to implement economic growth initiatives in the second half of 2026 to address post-war challenges, revitalize growth potential, and address economic polarization. An official from the finance ministry explained that the South Korean economy would likely remain resilient even if global oil prices remain above US$100 per barrel, thanks to the established fuel price cap.