The South Korean government, in its March issue of the 'Recent Economic Trends' report, stated that while the economy shows signs of recovery due to improved consumption and strong exports, particularly in semiconductors, it also faces downside risks from ongoing geopolitical tensions in the Middle East. After an eight-month hiatus, the term "downside" reappeared in government assessments, particularly in the context of the uncertainties stemming from the U.S.-Iran conflict, which may be causing fluctuations in international oil prices.

Despite these risks, several economic indicators suggest that recovery is still on track, with retail sales showing an increase of 2.3% from the previous month and an optimistic outlook for February based on consumer sentiment and spending behavior. Exports have remained robust, particularly in the semiconductor sector, which experienced a significant year-on-year increase of 28.7% in February. Products such as computers and ships also contributed to this growth.

However, the report cautions about potential economic pressures arising from sustained geopolitical risks, rising prices, and increased public burden. With the threat of inflation and the possibility of a slowdown in employment growth, the government emphasizes the need to monitor these developments closely and acknowledges the uncertainties that continue to exist within vulnerable sectors of the economy, including construction and employment.