SEOUL (Reuters) – South Korea’s central bank chief said on Tuesday there are signs of recovery in domestic demand although exports remain weak, adding that policy would be decided on the basis of economic and financial indicators.
Bank of Korea (BOK) Governor Lee Ju-yeol made the remarks during a regular meeting with private-sector economists, sticking with his stance of keeping the door open to further policy easing.
“Domestic consumption is showing moderate signs of recovery while offshore demand is weak,” said Lee, speaking after data earlier on Tuesday showed consumer sentiment rose to a seven-month high in May.
Lee said sluggish growth in China and a weak Japanese yen were “causes for concern” as they were hurdles that could not be easily overcome.
South Korea’s growth relies too much on exports, Lee said, noting exports were 43 percent of South Korea’s GDP.
“In advanced countries, exports take up around 10 percent – this is a big difference compared to Korea and weak global demand affects us considerably more,” he said.
The governor added that May exports were showing a downward trend similar to April, with exports from May 1-20 falling 7.6 percent from a year earlier, the customs agency said earlier this month.
(Reporting by Taemin Chang and Christine Kim; Editing by Eric Meijer)