Finance minister Choo Kyung-ho said on Monday that the South Korean economy appears to be in the initial phase of recovery.

The minister presented the assessment during a meeting of economy ministers, saying that despite some monthly fluctuations, the recovery is beginning to gain traction.

Choo said that although industrial output slipped on-month in July due to bad weather and temporary factors, the nation is witnessing a continued rebound in exports and service industries.

The minister said that despite the summer vacation season in August, the drop in exports narrowed significantly from a month earlier on the back of improvements in the semiconductor sector, with the trade balance posting a surplus for the third consecutive month.

Choo said that the decline in exports is expected to narrow further in September, projecting growth in exports within the fourth quarter, but added that the government remain vigilant and refrain from excessive optimism or pessimism amid lingering uncertainties from China.