Government Specifies 'Solid Economic Recovery' in Green Book for First Time in Two Years: "Sharp Export Growth, Improved Domestic Demand"

The Term "Solid" Reappears for the First Time Since September 2024
Exports Surge 68.7% in August... Polarization Persists

The government has assessed Korea’s economy as experiencing “solid economic recovery” for the first time in two years. This view is based on the judgement that gross domestic product (GDP) and key economic indicators have settled at a higher level. However, as international oil prices surpass 100 dollars, and external uncertainties intensify—including trade frictions with the United States—the government also raised its level of alertness accordingly.

Containers waiting for export and import are piled up at Shingamman and Gamman Piers in Busan Port. Photo by Yonhap News.

On the 11th, the Ministry of Economy and Finance stated in the “Economic Trends for September 2026 (Green Book)” that “Korea's recent solid economic recovery continues, with exports making a significant leap and domestic demand, including consumption, showing improvement.” The term “solid economic recovery” was used in the Green Book for the first time in two years since September 2024. After describing the trend as “recovery flow” in May, “consolidation” in July, and “reinforcement” in August, the government has continued to increase the intensity of its diagnosis by now referring to the trend as “solid.”

Im Honggi, Director of Economic Analysis at the Ministry, explained, “The use of the term ‘solid’ means that our economy has gained fast and strong growth momentum.” He added, “After nearly four consecutive quarters of virtually zero growth, the economy began recovering from the second quarter of 2025. The overall level of GDP and other major economic indicators has moved up a notch and has stabilized at that stage.” Im also noted, “Unless faced with major unexpected variables, this robust growth trend is highly likely to continue into next year.”

Despite the upgrade in its assessment of the economy, the government’s evaluation of external conditions has grown more cautious, moving from “uncertainties remain” last month to “uncertainties somewhat expanding” this month. Im explained, “All three major international oil benchmarks—Dubai crude, Brent crude, and West Texas Intermediate (WTI)—have now exceeded the 100 dollars per barrel level.” He continued, “Additionally, because negotiations between Iran and the United States are not just at a simple stalemate but are actually showing more tangible signs of conflict, we must maintain a high level of vigilance regarding external conditions.”

Exports are at the core of the economic recovery trend. In August, exports (measured by customs clearance) soared by 68.7% year-on-year to 98.26 billion dollars, while average daily exports also jumped 72.5% to 4.47 billion dollars. Explosive growth in IT and leading sectors such as computers (419%), semiconductors (209%), and cosmetics (52%) drove overall growth, while autos (-30%) and ships (-46%) declined. By region, there was continued strength in China (119.3%), the United States (89.3%), and ASEAN (75.4%). As a result, the trade balance in August recorded a surplus of 34.75 billion dollars.

Other indicators including production, consumption, employment, and prices showed a mixed picture amid the overall recovery. In July, all-industry production held steady at 0.0% month-on-month, while facility investment surged by 7.5%. However, retail sales declined by 2.4% due to poor performance in durable goods. Both the leading and coincident composite indexes for July, as well as the Corporate Business Sentiment Index (CBSI) for August (99.6), rose, but the Consumer Sentiment Index (CSI) for August (104.5) slightly dropped. Consumer prices in August climbed 3.1% year-on-year, with the base effect of telecom fee discounts and rising oil prices widening the gain. Employment in August also saw the number of employed persons increase by 184,000 year-on-year, with most of the growth in the service sector (345,000). Meanwhile, manufacturing (-38,000), construction (-32,000), and youth employment (-143,000) all continued to experience declines.

To minimize the impact of the Middle East conflict, the government will thoroughly manage the supply of major items such as energy and raw materials. It also plans to steadily implement measures to stabilize prices of essential goods ahead of the Chuseok holiday. In addition, the government announced, “We will swiftly advance the ‘Economic Growth Strategy for the Second Half of 2026’—centered on developing post-Middle East conflict strategies, boosting the potential growth rate, and responding to polarization.”

This content was produced with the assistance of AI translation services.