South Korea's state-run think tank on Monday expressed worry about slumping private consumption caused by political unrest following the impeachment of President Park Geun-hye.

The Korea Development Institute (KDI) said in its monthly report that economic recovery remains lackluster due to the weakening of consumer confidence and the slump in manufacturers' employment that offset an improved facility investment.

Retail sales, which reflect consumer spending, rose 1.6 percent in December from a year earlier, after growing 3.2 percent in the previous month.

Confidence among South Korean consumers worsened further in January compared with the previous month as uncertainty lingered over the political sphere following the presidential impeachment.

President Park was impeached on Dec. 9 in the parliament over her alleged involvement in the corruption scandal. The constitutional court is widely forecast to decide whether to end her presidency or reinstate her by the middle of March.

Production in all industries grew 3.3 percent in December, but it was lower than a 4.9 percent increase in the prior month. Manufacturers posted a capacity rate of 73.0 percent in December, down from 73.8 percent a month ago.

Facility investment in December jumped 10.0 percent compared with a year earlier on robust demand for general machinery that offset reduction in the transport equipment demand.

source: Xinhua