The Korean economy has been improving due to strong exports, which lead to increases in production and investment. However, domestic consumption has yet to gain momentum.
The economy added 424,000 jobs year-on-year in April backed by the strong construction and service sectors as well as the recovering manufacturing sector.
Consumer price inflation slowed in April from 2.2 percent to 1.9 percent compared with a year ago as the prices of agricultural products and petroleum products have become stable.
Mining and manufacturing production rose 1.0 percent month-on-month in March backed by strong exports and the release of new models. Automobiles, IT products and chemicals increased.
Service output rose for the fifth consecutive month in March (up 0.2% → up 0.4%, m-o-m) as professional, scientific & technical services and real estate & renting have been strong.
Retail sales stayed unchanged in March after an increase of 3.2 percent in the previous month. Sales of automobiles and mobile phones, as well as confidence, improved.
Facility investment jumped in March from an 8.9 percent fall in the previous month to a 12.9 percent increase due to strong IT sectors, including semiconductors. Construction investment increased for the second consecutive month as housing construction increased in the private sector and government’s SOC spending rose.
In March, the cyclical indicator of the coincident composite index rose 0.3 points compared with the previous month due to strong construction completed and nonfarm payrolls. The cyclical indicator of the leading composite index fell 0.1 points as the ratio of job openings to job seekers decreased.
Exports in April (up 13.6% → up 24.2%, y-o-y) rose for a sixth consecutive month, posting double-digit growth for four months, due to strong major export items, such as semiconductors and display panels.
In April, stock prices rose backed by net foreign purchases of Korean shares and amid expectations of real economic recovery. The dollar-won exchange rate rose due to a strong dollar.
Housing prices (up 0.06% → up 0.10%) and Jeonse (lump sum deposits with no monthly payments) prices (up 0.07% → up 0.07%) rose slightly from the previous month in April.
The economy shows signs of improvement as exports continue to increase and confidence has been growing. However there are uncertainties arising from recent trade issues and Fed’s rate hikes, and job markets have yet to improve.
The government will strengthen its risk management, and will work to help improve job markets and boost the real economy through supplementary budgets and other macroeconomic measures.