The government reaffirmed that the economy is recovering, driven by improved domestic demand and semiconductor exports.

The Ministry of Economy and Finance presented the assessment in the January issue of its monthly economic report, the Green Book, released on Friday.

The ministry said the economy has continued to recover, supported by improvements in domestic demand, including consumption, and robust exports led by semiconductors. 

The announcement marked the third consecutive month the ministry has used the term "recovery" to describe South Korea's economic situation.

The government, however, pointed to lingering downside risks, including weak employment conditions in vulnerable sectors and uncertainty surrounding the pace of recovery in construction investment and the impact of U.S. tariffs.

It also warned that the global economy may experience continued volatility in international financial markets and a slowdown in trade and growth, driven by tariff actions by major economies and ongoing geopolitical uncertainty.