Spending in Korea will likely to remain sluggish as lingering economic uncertainties and skyrocketing crude oil prices could hurt overall consumer sentiment, the finance ministry said Tuesday.
"Spending conditions seem to be improving thanks to continued recovery of employment and easing inflation but uncertainties at home and abroad will likely serve as a drag," the ministry said in its monthly report to assess the latest economic trends.
Facility investment will likely rebound "to some extent" due to a rise in spending in the semiconductor industry but the ministry is still concerned that cloudy market situations could hamper the recovery.
Investment in the construction sector is also expected to remain sluggish on delayed improvement in housing market and worries among builders over the future economic direction, it added.
Oil prices were cited as another major factor that could affect the country's economy as high energy costs could put a damper on vehicle and fuel product sales.
In February, South Korea's average gasoline prices surged to a monthly high of 1,986.54 won ($1.78), up 31.46 won from the previous month, according to a state-run oil company.
The ministry, meanwhile, predicted that the county's current account will go into the black for February from a deficit of around $800 million in January as it expects more trade surplus and improving service balance. (Yonhap)